Source: https://www.scribd.com/document/241253112/Reed-Construction-Data-Inc-v
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day Daubert hearing on the admissibility of that testimony on J uly 30 and 31, 2014.
for summary judgment is granted in part and denied in part.
entities, the claims against those Defendants are dismissed for failure to prosecute.
The parties are in the business of providing construction product information (CPI).
only two services in the market.
comparisons with competing CPI providers.
Network. To do this, it needed to know how many projects were listed on Reed Connect.
Roper reports were biased in McGraw-Hills favor.
ratio was closer to 2.6-to-one.
dismissed the RICO claims, but allowed the remaining claims to proceed.
testimony under Federal Rule of Evidence 702.
Reed has retained Dr. Warren-Boulton to answer four questions related to this case.
and his answer to the final question as his damages opinion.
They will not be considered.
variable) by holding all other potentially relevant variables (the control variables) constant.
that influence is called a coefficient.
linear models and many other methods of calculating the optimal coefficients exist. Because Dr.
dimension. E.g. Mark Heller, Temporal Parts of Four-Dimensional Objects, 46 PHIL. STUDS.
variable and seeing if the residuals are significantly correlated with an explanatory variable. Dr.
Warren-Boultons is a residual model.
ratio of national to local pricing (for each party) the price index ratio.
is wide; by the end, it has narrowed to nothing.
this variable to his second model, which is otherwise identical to the first.
Dr. Warren-Boulton could claim strong statistical proof for the funnel theory of damages.
Trowel Trades Intl Pension Fund v. Credit Suisse Sec. (USA) LLC, 752 F.3d 82 (1st Cir. 2014).
the proponent of the experts testimony to prove that it is admissible. Moore v. Ashland Chem.
Co., Ltd. v. Carmichael, 526 U.S. 137, 141 (1999).
constitutes good science and, therefore, whether it produces scientific . . . knowledge.
accepted in the relevant analytical community. Frye v. United States, 293 F. 1013, 1014 (D.C.
J .) [hereinafter Daubert II], on remand from Daubert, 509 U.S. 579.
tolerable range, disputes over competing expert opinions are to be resolved by the trier of fact.
Outside it, courts exclude the testimony.
196 F.3d 435, 440 (2d Cir. 1999) (discrimination); Koger v. Reno, 98 F.3d 631, 637 (D.C. Cir.
Rossini v. Ogilvy & Mather, Inc., 798 F.2d 590, 593 (2d Cir. 1986) (discrimination); Morgan v.
Harris Trust & Savings Bank, 867 F.2d 1023, 1028 (7th Cir.1989) (discrimination); Allen v.
Gordon Partners v. Blumenthal, 02-CV-7377, 2007 WL 431864 (S.D.N.Y. Feb. 9, 2007), rep.
and rec. adopted, 02-CV-7377, 2007 WL 1438753 (S.D.N.Y. May 16, 2007), affd, 293 F.
Appx 815 (2d Cir. 2008) (securities); see also S.E.C. v. Razmilovic, 738 F.3d 14, 34 (2d Cir.
necessary for a regression analysis to be admissible. E.g., Bickerstaff, 196 F.3d at 450.
were made was a matter for the jury to decide. Id.
might influence the dependent variable. Bazemore, 478 U.S. at 400.
Bazemore was decided before Daubert. Nonetheless, the Second Circuit has relied on it since.
E.g., Bickerstaff, 196 F.3d 435.
impermissibly biased the results was a matter for the jury to decide.
regression analysis and the opinions he derived from it. In rebuttal, McGraw-Hill called Dr.
Sumanth Addanki to examine Dr. Warren-Boultons work and opine on its potential flaws.
Neither party challenges the qualifications of the others expert. Reed has not challenged Dr.
Boultons regression analysis is admissible under Rule 702.
adequately explain the narrowing gap without the presence of any misconduct.
that another unobserved variableincreased competitioncan explain the narrowing gap. Dr.
in his methodology discussed below, renders the model inadmissible under Daubert.
Second, McGraw-Hill takes issue with a consequence of Dr. Warren-Boultons model.
And Veblen goods are those characterized by conspicuous consumption.
reductio holds and suggests that Dr. Warren-Boultons conclusion is flawed.
competing product and the negotiated product.
that Warren-Boultons analysis is inadmissible under Daubert.
they account for the major variables affecting a given analysis. Bazemore v. Friday, 478 U.S.
companies have less cash on hand and fewer projects to hunt for.
omission is fatal to Dr. Warren-Boultons first model.
to his model, a new problem arose: multicollinearity.
conclusion that Dr. Warren-Boultons method is inadmissible under Rule 702.
significant to any reasonable degree and that this alone ought to doom his regression analysis.
Courts finding that Dr. Warren-Boultons testimony is inadmissible under Rule 702.
for pooling problems, but many statisticians rely on the Chow test.
here. McGraw-Hill has persuasively distinguished these articles on that ground.
discuss only the Chow test.
Dr. Addanki claims to have found no damages at all.
they were. This is insufficiently scientific to be admissible under Rule 702.
date for the observations in Dr. Warren-Boultons analysis has an outcome-determinative effect.
Hills motion for summary judgment.
whole, a rational jury could find in favor of the non-moving party, Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986).
element of her claim or defense illustrating her entitlement to relief. Vermont Teddy Bear Co. v.
Cir. 1996) (citing Matsushita, 475 U.S. at 587).
origin of his or her or another persons goods, services, or commercial activities.
Lanham Act. Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144, 153 (2d Cir.
show, using extrinsic evidence, that the misleading statement in fact misled consumers.
If the deception was willful, consumer confusion is presumed. Resource Developers, Inc.
heightened standard applies because Reed seeks damages.
Act. Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc., 314 F.3d 48, 58 (2d Cir.
and the description of provenance were literally false.
claims that these statements were literally false.
promotion. Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc., 314 F.3d 48, 58 (2d Cir.
2002). Under the Fendi test, the contested representations must be  commercial speech; . . .
adopting the test from Gordon & Breach Sci. Publishers S.A. v. Am. Inst. of Physics, 859 F.
Supp. 1521, 1536 (S.D.N.Y. 1994) (Sand, J .)). Here, the first two issues are not contested.
in isolation, were not disseminated widely enough to satisfy Fendi.
must answer a preliminary question: are the statements to be considered together or in isolation?
Court should consider the statements as part of an overall campaign of publicity.
Courts assessing Lanham Act claims are to consider an allegedly false advertisement . . .
which dissection is appropriate. Level of generality is destiny in interpretive disputes . . . .
abrogated by Natl Federation of Independent Businesses v. Sebelius, 132 S. Ct. 2566 (2012).
however, the Fifth Circuit held that presentation materials . . . specifically developed to target . .
sweetener to produce the canned sodas. Seven-Up, 86 F.3d at 1384.
allegedly misleading advertising and promotional campaign comprising several elements. 859 F.
individual sales representative to an individual customer . . . . Licata & Co. v. Goldberg, 812 F.
superiority of its service through a series of individual conversations.
customers from a competitor on a large scale and the effectassuming there is oneis the same.
McGraw-Hills statements are advertising within the meaning of the Lanham Act.
comparison between the impression on the listener and reality. Id. (quoting Schering Corp. v.
be unambiguous to be considered literally false. Id. (quoting Novartis Consumer Health, Inc.
v. Johnson & Johnson-Merck Pharm. Co., 290 F.3d 578, 586-87 (3d Cir. 2002)).
portion of listenersthat conflicts with reality. Id. at 153.
six categories of literally false statements, which are described above. Each is addressed in turn.
E.g., BLACKS LAW DICTIONARY 1017 (9th ed. 2009) (According to expressed language.).
message that Ropers involvement was not a sham. This, Reed contends, is literally false.
Reports (which were replicated in the ad hoc comparisons) that lead to literally false statements.
reasonable juror could conclude that the statement was literally false.
that Reed has met its burden of proving falsity.
projects only after deconstructing the Reed Connect database and correcting Reeds error . . . .
project counts using the back-end databases [that] support both companies user interfaces.
Connect, but it is disputed whether this was due to Reeds error or McGraw-Hills deception.
statements in the executive briefs were literally false.
of exclusivity was literally false when made.
comparisons other than the ones to which McGraw-Hill was referring when it touted these ratios.
5:1/3:1 ratios were false because other studies suggested significantly lower numbers.
are literally false. Therefore, consumer deception is presumed. See Time Warner Cable, Inc. v.
Foundation, 926 F.2d. 134, 140 (2d Cir. 1991).
deception for the remaining statements. For the reasons that follow, it has not.
have to adduce evidence of consumer confusion.
consumers were confused by McGraw-Hills allegedly misleading statements.
Hill engaged in deliberate deception.
consumers were, in fact, confused by the allegedly misleading statement. E.g., McNeilab, Inc. v.
(citing and quoting C.L.A.S.S. Promotions, Inc. v. D.S. Magazines, Inc., 753 F.2d 14, 18 (2d Cir.
reasonable juror would give his testimony.
(Thomas Tr. 63:12-19), 4 (Welch Tr. 36:9-37:23), 5 (Chester Tr. 71:20-72:12), 11 (Franklin Tr.
were misled by McGraw-Hills statements.
any of these statements is material.
The parties disagree on the appropriate legal standard to apply to questions of materiality.
fake furs. Id. at 1049. The plaintiffs instead sought relief based on the misleading innuendoes .
and tiger pelts had already been prohibited by the Endangered Species Conservation Act.
standard has evolved, so the analysis does not end here.
and the manner in which the tests were conducted, not the inherent quality, of the shampoo.
campaigns materially influenced consumers purchasing decisions.
statements were material to consumers purchasing decisions.
claims under Section 43(a) of the Lanham Act is granted.
2 of the Sherman Act. The parties do not contest most of the elements of a Sherman Act claim.
second is whether Reed has rebutted it.
or other offset by rivals.
forecloses both of these arguments.
factor test to rebut the de minimis presumption).
operates against third-party disparagement as well.
campaign was an unfair restraint of trade). Insignia Systems is therefore inapposite.
dominant monopolist published allegedly disparaging statements against a new market entrant.
presumption. Accordingly, the Court applies the presumption in this case.
Physicians & Surgeons v. Am. Bd. of Podiatric Surgery, Inc., 323 F.3d 366, 371 n.6 (6th Cir.
disparaging representations could only have been made . . . for [a] short period of time . . . .
that the de minimis presumption can be rebutted even if the plaintiff cannot win on all six factors.
of this activity is so unwarranted by competitive exigencies as to constitute an entry barrier.).
there is a harm to competition itself. Podiatric Physicians, 323 F.3d at 372.
succeeds in rebutting the presumption that no cognizable antitrust injury occurred.
statements about the 5:1 and 3:1 project ratios.
light of the statement itself and its relationship to the state of the world.
challenged statements were clearly false.
cannot show that any of them was clearly material.
Reed and McGraw-Hill argue over how to evaluate the relevant buyers knowledge.
The parties agree that the exposure in this case was prolonged.
because they were not empirical facts about [Reed Connect] that could easily be disproven . . .
McGraw-Hill is entitled to summary judgment on its antitrust claims.
torts. For the reasons that follow, Reeds unfair competition claim survives but the rest do not.
State of New York, and so its conflict rules apply.
start of the litigation, after resolution of a motion to dismiss and after the close of fact discovery.
Reeds waiver argument must fail. (Defendants Reply, at 27 (citing S&L Vitamins, Inc. v.
Australian Gold, Inc., 521 F. Supp. 2d 188, 213 (E.D.N.Y. 2007).).
Stratton, 888 F.2d 239 (2d Cir. 1989) (finding waiver on appeal for the second time); Intl Bus.
(2d Cir. 2002) (finding waiver during appeal from summary judgment); Larsen v. A.C.
Carpenter, Inc., 620 F. Supp. 1084 (E.D.N.Y. 1985) (finding waiver in bench trial opinion).
Am., Inc., 65 N.Y.2d 189, 196 (1985) (quoting Babcock v. Jackson, 12 N.Y.2d 473, 481 (1963)).
the state laws in conflict are primarily conduct regulating or loss allocating. Padula v.
due care and the primary difference is in how loss will be allocated after the tort occurs).
Cost, 3 J . L. & ECON. 1 (1960), and Richard Posner, A Theory of Negligence, 1 J . LEGAL STUDS.
compensate sufferers.), and J ules Coleman, The Economic Structure of Tort Law, 97 YALE L.J .
1233 (1988), and Scott Hershovitz, Two Models of Tort (and Takings), 92 VIRGINIA L. REV.
1147 (2006). See generally Glanville Williams, The Aims of the Law of Tort, 4 J . CURRENT. L.
methodology that obviates the need for this Court to delve too deeply into the cauldron.
allocating. The law of the place of the tort will, therefore, presumptively apply.
subscriptions over the phone. They were in New York; Reeds representatives were in Georgia.
Hills conduct, New York law applies to the fraud claim.
The parties do not dispute their respective domiciles. Reed is a Georgia domiciliary.
McGraw-Hill is a New York domiciliary.
of fraud. This stretches direct, immediate, and proximate beyond what those words will bear.
McGraw-Hill is entitled to summary judgment on Reeds fraud claims.
and New York trade secrets law, whichever applies.
laws of the relevant jurisdictions come to the same result: Reeds CPI is not secret.
in order to qualify for trade-secrets protection. Compare LinkCo, Inc. v. Fujitsu Ltd., 230 F.
twentieth century. See F.W. Dodge Co. v. Construction Information Co., 66 N.E. 204 (Mass.
1903); F.W. Dodge Corp. v. Comstock, 140 Misc. 105, 109 (N.Y. Sup. Ct., Erie Cnty. 1931).
secret when it is sold subject to a confidentiality agreement.
requires that parties take reasonable efforts to maintain . . . secrecy.).
plaintiffs window which was available on the open market); Blank v. Pollack, 916 F. Supp.
here, however, is helpful to its unfair competition claim, which is discussed below.
dishonest, unfair, or improper means; and (4) the defendants acts injured the relationship.
Catskill Development, LLC v. Park Place Entertainment Corp., 547 F.3d 115, 132 (2d Cir.
on Reeds tortious interference claim.
committed the tort of unfair competition by misappropriating its labors and expenditures . . .
McGraw-Hill contends should applythe tort of unfair competition does not exist.
New York law will apply.
so this contention is irrelevant.
marked only by the conscience, justice and equity of common-law judges. LinkCo., 230 F.
Supp. 2d at 501 (citing and quoting Demetriades v. Kaufmann, 698 F. Supp. 521, 525 (S.D.N.Y.
requires proof that the defendant took something in which the plaintiff enjoyed a property right.
Hills argument is beside the point.
own database. The project listings are the parties stock in trade. Compare INS, 248 U.S. at 236.
Reed has a property interestor at least a quasi property interest, id.in its project leads.
the litigation. Reed has offered sufficient evidence to survive summary judgment on this claim.
claim survives the statute of limitations.
For the foregoing reasons, McGraw-Hills motion to exclude the testimony of Dr.
Hill on all of Reeds remaining claims with the exception of Reeds unfair competition claim.
The Clerk of the Court is directed to close the motions at docket numbers 149 and 168.

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