Opinion ID: 2981149
Heading Depth: 2
Heading Rank: 2

Heading: BSC’s motion for a new trial

Text: After the jury verdict, BSC filed a motion for judgment as a matter of law or, in the alternative, for a new trial. BSC’s theory regarding a new trial is that the district court improperly excluded its expert witness, Cobb. Specifically, it argues that Cobb’s testimony was reliable based on his experience and education, his reliance on “best practices,” and his consideration of alternate explanations for the various problems in Jack Henry’s systems. We disagree. We review a trial court’s refusal to grant a motion for a new trial for an abuse of discretion. See Mike’s Train House, Inc. v. Lionel, LLC, 472 F.3d 398, 405 (6th Cir. 2006). “Even if a mistake has been made, a new trial will not be granted unless the evidence would have caused a different outcome at trial.” Nida v. Plant Prot. Ass’n Nat’l, 7 F.3d 522, 527 (6th Cir.1993). The district court denied BSC’s motion for a new trial, stating that it had “explained its reasons for excluding [Cobb’s] testimony” in a previous order, and it “decline[d] to rehash this 14 Nos. 10-6258/10-6507, Jack Henry & Associates, Inc. v. BSC, Inc. already heavily-litigated issue.” The previous order was issued after a hearing on Jack Henry’s motion to suppress Cobb’s testimony, at which the district court questioned Cobb extensively. Ultimately, the district court found that the Daubert factors weighed in favor of excluding Cobb’s testimony. See Daubert, 509 U.S. 579. When performing a Daubert analysis, a district court must “determine whether the evidence ‘both rests on a reliable foundation and is relevant to the task at hand.’” Ky. Speedway, LLC v. Nat’l Ass’n of Stock Car Auto Racing, Inc., 588 F.3d 908, 915 (6th Cir. 2009) (quoting Daubert, 509 U.S. at 597). Several factors bear on the reliability of expert testimony: (1) whether a theory or technique can be or has been tested; (2) whether it has been subjected to peer review and publication; (3) whether a technique has a known or potential rate of error and the existence of standards controlling its operation; and (4) whether the theory or technique enjoys general acceptance in a relevant scientific community. Mike’s Train House, 472 F.3d at 407. These factors are “neither definitive, nor exhaustive, and may or may not be pertinent to the assessment in any particular case.” Nelson v. Tenn. Gas Pipeline Co., 243 F.3d 244, 251 (6th Cir. 2001) (citing Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141 (1999)). The inquiry is “flexible” and focuses “solely on principles and methodology, not on the conclusion that they generate.” Daubert, 509 U.S. at 594-95. The proponent of the testimony bears the burden of proving admissibility, Nelson, 243 F.3d at 251 (citing Daubert, 509 U.S. at 592 n.10), and on appeal, we have instructed that the proffered evidence must also be outcome-determinative. See Nida, 7 F.3d at 527. In granting Jack Henry’s motion to exclude, the district court focused on four aspects of Cobb’s reports prepared for the trail: (i) his definition of “defect”; (ii) his “criticality” scale; (iii) 15 Nos. 10-6258/10-6507, Jack Henry & Associates, Inc. v. BSC, Inc. whether Cobb considered alternative explanations for the problems about which he was opining; and (iv) his analysis and conclusions. Regarding Cobb’s definition of “defect,” the district court observed that Cobb’s report did not define the term, and he provided no authoritative support for the definition he proffered at the hearing. Indeed, he defined a defect merely as a problem that Jack Henry corrected. Thus, his definition did not “distinguish between actual defects and actions taken by [Jack Henry] in response to customer complaints based on something other than a software defect.” At the hearing, Cobb conceded that his definition had not been peer-reviewed. He also admitted that he did not use the sources he relied upon in his rebuttal report, including a leading book in the software field, in formulating his definition of “defect.” Because it had not been subject to peer review, tested, or widely accepted in the scientific community, the district court determined that Cobb’s definition of “defect” was unreliable under the Daubert inquiry. Cobb’s “criticality” scale, which he used to evaluate the seriousness of the alleged defects, also failed Daubert. First, Cobb admitted that it was not subject to peer review. Second, Cobb defined the scale as an “amalgamation of best practices from academia to different organizations,” but BSC did not show that the combined methodologies themselves satisfied Daubert. When an “expert offers an opinion that is based on a combination of two methodologies, each methodology must meet the Daubert criteria, and the combined methodology must meet those criteria also.” Ky. Speedway, LLC v. Nat’l Ass’n of Stock Car Auto Racing, Inc., No. 05-138, 2008 WL 113987, at  (E.D. Ky. Jan. 7, 2008) (citing Elcock v. Kmart Corp., 233 F.3d 734, 748 (3d Cir. 2000)). Cobb’s reports were silent as to the methodology that guided the development of his criticality scale. Thus, the district court reasoned, “even assuming that [Cobb] used multiple, independently-accepted 16 Nos. 10-6258/10-6507, Jack Henry & Associates, Inc. v. BSC, Inc. methodologies in drafting his report, [BSC has] failed to satisfy [its] burden of showing that [Cobb’s] ‘amalgamation’ is reliable.” (Id. at ) (citing Elcock, 233 F.3d at 748). Regarding Cobb’s failure to consider alternate explanations, the district court noted that the report only addressed “what he considered to be [Jack Henry-caused] defects. It did not contain any alternate explanations for the alleged issues that [BSC] encountered” with Jack Henry’s products. At the hearing, Cobb also admitted that he did not consider alternate explanations for some of the issues. The district court observed that the Federal Rules of Evidence instruct the court to consider “whether the expert has adequately accounted for obvious alternate explanations.” Fed. R. Evid. 702, Advisory Comm. Note. Consideration of alternate explanations is not a Daubert factor, and BSC correctly notes that the test does not require an expert to take into account all alternate explanations. But that does not mean the district court abused its discretion by considering factors that, though outside the strict confines of Daubert, are relevant to determining whether methodology is reliable: the Daubert factors are “neither definitive, nor exhaustive.” Nelson, 243 F.3d at 251. In light of the foregoing, the district court was within its discretion in finding that Cobb’s report and testimony were “unreliable” because, among other things, he admitted that his methodology did not include consideration of alternatives, including user error, connectivity problems, and legitimate software problems. Finally, the district court found that Cobb’s analysis and four conclusions were unreliable. Cobb’s first conclusion, that Jack Henry did not follow basic design and programming principles necessary for reliable transactions systems, was unreliable because his definition of “defect” and his criticality scale (on which the conclusion was based) were unreliable. Cobb’s second conclusion, 17 Nos. 10-6258/10-6507, Jack Henry & Associates, Inc. v. BSC, Inc. that Jack Henry’s “system was not sufficiently tested . . . before deployment” was unreliable because Cobb “admitted at the hearing that he did not know what testing procedures [Jack Henry] actually used.” See Daubert, 509 U.S. at 589-90 (“The subject of an expert’s testimony must be ‘scientific . . . knowledge.’ The adjective ‘scientific’ implies a grounding in the methods and procedures of science. Similarly, the word ‘knowledge’ connotes more than subjective belief or unsupported speculation.”) (alteration in original) (footnote omitted) (quoting Fed. R. Evid. 702). Cobb’s third conclusion was that there were “systemic problems with the interface” between various Jack Henry products—but, the district court observed, he came to this conclusion “without even reviewing the design template for the interface.” This opinion is not reliable because Cobb did not specifically identify any of the alleged problems with the interface in either of his reports. Cobb’s fourth and final conclusion was that “fixes to the system were not sufficiently tested before they were deployed.” But, as the district court pointed out, Cobb admitted not knowing what Jack Henry’s testing procedures actually were. The district court did not abuse its discretion, and so we need not determine whether the excluded testimony would have been outcome determinative. Nida, 7 F.3d at 527.