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Deere & Co. v. Ohio Gear

July 16, 2008

DEERE & COMPANY, AN ILLINOIS CORPORATION AND FUNK MANUFACTURING COMPANY, A KANSAS CORPORATION, PLAINTIFFS,
v.
OHIO GEAR, A SOUTH CAROLINA CORPORATION AND REGAL-BELOIT, A WISCONSIN CORPORATION, DEFENDANTS / THIRD-PARTY PLAINTIFFS,
CARSON'S NUT-BOLT AND TOOL COMPANY, INC., THIRD-PARTY DEFENDANT / FOURTH-PARTY PLAINTIFF
v.
J.T.D. STAMPING, INC., FOURTH-PARTY DEFENDANT.



The opinion of the court was delivered by: Joe Billy McDade United States District Judge

ORDER

Before the Court is Plaintiffs' Motion to Bar Testimony. (Docs. 182, 183.) Defendants / Third-Party Plaintiffs Ohio Gear and Regal Beloit filed a single Response to Plaintiffs' Motion to Bar Testimony. (Doc. 185.) Third-Party Defendant / Fourth-Party Plaintiff Carson's Nut-Bolt and Tool Company, Inc. also filed a Response to Plaintiffs' Motion to Bar Testimony. (Doc. 184.) For the following reasons, Plaintiffs' Motion to Bar Testimony is GRANTED in part and TAKEN UNDER ADVISEMENT in part.

BACKGROUND*fn1

In December 1997, Plaintiff John Deere & Company ("Deere") entered into a contract with Defendant Ohio Gear in which Ohio Gear agreed to provide differential assemblies for tractors manufactured by Deere. Deere provided Ohio Gear with specifications for the components of the differential assemblies, including specifications for the type and characteristics of the washer to be used. These specifications expressly required that the washer be heat treated. Ohio Gear shipped the differentials to Plaintiff Funk Manufacturing Company's ("Funk") manufacturing plant in installments over the course of 1998 and 1999. The initial shipments during that time period contained the correct heat treated washers and performed as intended.

However, in February 1999, Plaintiffs received notice that a failure occurred in one of the tractors with a differential assembly provided by Ohio Gear. Specifically, consumers complained of a loud noise emanating from the rear of the tractor. Plaintiffs conducted an investigation and determined the noise was due to non-heat treated ("soft") washers used in the differential assembly.

Plaintiffs notified Ohio Gear that soft washers had been installed in the differential assemblies. Ohio Gear conducted its own investigation and determined the second installment of washers it received from Defendant Carson's Nut Bolt and Tool Company, Inc. ("Carson's ") were soft washers. Carson's admitted it had inadvertently shipped soft washers received from Fourth-Party Defendant J.T.D. Stamping, who had contracted with Carson's to perform the heat treatment. Ohio Gear further determined the washers could not perform as intended and identified the probable shipping dates of the soft washers to Plaintiffs as between August 1998 and February 1999. During this time period, over 7000 non-conforming washers were shipped.

When Plaintiffs received the complaint in February 1999, they had already installed most of the differentials into tractors which had subsequently been sold throughout the United States and Europe. Due to the large number of tractors fitted with soft washers and the looming planting season, Plaintiffs conducted a large-scale, multi-national recall program to replace the soft washers. The recall program encompassed only the tractors identified or suspected of having differential assemblies with the non-conforming, soft washers. Plaintiffs assert the recall was only to repair the soft washer problem, and cost $3,990,524.00.

Plaintiffs sued Ohio Gear for breach of contract, seeking damages for the costs associated with the recall. Plaintiffs allege the recall was prompted by the reports of a loud noise emanating from the rear of the tractor, and that the soft washers supplied by Ohio Gear caused the noise. Ohio Gear employed Frederick Kucklick, a mechanical engineer, to testify that the differential assemblies would have failed regardless of whether the washers were heat treated. Plaintiffs filed this Motion seeking to exclude Mr. Kucklick's testimony because the information in his report is irrelevant and has no bearing on the case at bar. A hearing on this Motion was conducted on June 2, 2008. After listening to opening statements, the Court decided to first determine which of Mr. Kucklick's opinions, if any, are relevant to the case at bar. Then, if necessary, the Court will conduct an evidentiary hearing to decide whether Mr. Kucklick is qualified to render such opinions, and whether they are admissible under Federal Rule of Evidence 702 as interpreted by the Supreme Court in Daubert v. Merrell Dow Pharm, Inc., 509 U.S. 579 (1993).

LEGAL STANDARD

The admission of expert testimony is governed by Rule 702 of the Federal Rules of Evidence and the principles set forth in Daubert and Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137 (1999). A district court is required to determine, as a threshold matter, whether the expert would testify to valid scientific knowledge, and whether that testimony would assist the trier of fact with the facts at issue. Daubert, 509 U.S. at 592. The district court is to act as a 'gate keeper' who determines whether the proffered expert testimony is both reliable and relevantbefore accepting a witness as an expert. Autotech Tech. Ltd. P'ship v. Automationdirect.com, 471 F.3d 745, 749 (7th Cir. 2006). Relevant evidence is that which has a "tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Daubert, 509 U.S. at 587 (quoting Fed. R. Evid. 401). "Testimony which does not relate to any issue in the case is not relevant," and therefore not likely to assist the trier of fact in determining a fact at issue. Id. at 591. It is not necessary to determine whether proposed expert testimony is reliable if the testimony is irrelevant to the present case. See Ervin v. Johnson & Johnson, Inc., 492 F.3d 901, 904 (7th Cir. 2007).

ANALYSIS

The purpose of this Order is to determine whether Mr. Kucklick's testimony and report are relevant to this case, meaning he has "applied the principles and methods reliably to the facts of the case." Fed. R. Evid. 702(3). This order does not address the reliability of Mr. Kucklick's testimony, it only limits its inquiry to determining whether the proffered testimony is relevant to this case. Irrelevant issues need not be subjected to an inquiry as to their reliability. See Ervin, 492 F.3d at 904. Any relevant opinions in Mr. Kucklick's report will be scheduled for an evidentiary hearing to examine their reliability.

Ohio Gear argues Mr. Kucklick's opinions are relevant to the elements of causation and damages. As to causation, Ohio Gear claims that due to overarching design flaws in the differential, the noise that prompted the recall would have existed regardless of whether hard or soft washers were used (see Tr. at 4-5), and that other inherent design flaws would have caused the differential to fail in the future. Ohio Gear further argues that Deere is claiming damages for repairs done during the recall campaign that went beyond replacing the soft washers, and Ohio Gear is not responsible for any additional costs related to those repairs (see Tr. at 7). Ohio Gear has not argued that Mr. Kucklick's testimony is relevant to showing there was no breach of contract for providing soft washers instead of heat treated washers, and none of his reported opinions proffer any ...


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