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BVS, Inc. v. CDW Direct, LLC

United States District Court, N.D. Iowa, Cedar Rapids Division

February 19, 2015

BVS, INC., Plaintiff,
CDW DIRECT, LLC, Defendant and Third-Party Plaintiff,
ARROW ELECTRONICS, INC., TSSLINK, INC. and NETAPP, INC., Third-Party Defendants. NETAPP, INC., Counter Claimant,
CDW DIRECT, LLC, Counter Defendant.


LINDA R. READE, Chief District Judge.


The matter before the court is BVS, Inc.'s ("BVS") "Motion to Strike CDW Direct, LLC's Expert Witnesses" ("Motion") (docket no. 101).


On April 16, 2012, BVS filed an Amended Complaint (docket no. 38) against CDW Direct, LLC ("CDW"). In the Amended Complaint, BVS alleges breach of contract (Count I), unjust enrichment (Count II), breach of express warranty (Count III), breach of implied warranty of merchantability (Count IV), breach of implied warranty of fitness for a particular purpose (Count V), fraud (Count VI) and fraudulent nondisclosure (Count VII)[1] against CDW.

On May 9, 2012, CDW filed an Answer (docket no. 45) to the Amended Complaint, denying BVS's claims and asserting affirmative defenses. On December 14, 2012, CDW filed a Motion for Summary Judgment (docket no. 70). On March 14, 2013, BVS filed the Motion. On March 28, 2013, the court granted CDW's motion for summary judgment against BVS, which rendered the Motion moot. March 28, 2013 Order (docket no. 109). On July 17, 2014, the Eighth Circuit Court of Appeals reversed and remanded. See BVS, Inc. v. CDW Direct, LLC, 759 F.3d 869, 873 (8th Cir. 2014). In light of the Eighth Circuit's decision, the Motion is no longer moot.

On September 17, 2014, CDW filed a Resistance (docket no. 145). On September 26, 2014, BVS filed a Reply (docket no. 146). On February 17, 2015, the court held a Final Pretrial Conference at which it heard argument on the Motion. See February 17, 2015 Minute Entry (docket no. 181). The Motion is fully submitted and ready for decision.


BVS is an Iowa corporation with its principal place of business in Cedar Rapids, Iowa. CDW is an Illinois limited liability company with its principal place of business in Vernon Hills, Illinois. The court has diversity jurisdiction over this case because complete diversity exists between BVS and CDW and the amount in controversy exceeds $75, 000. See 28 U.S.C. ยง 1332 ("The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between... citizens of different States....").


In late 2010, BVS was looking to update several components of its computer system, including its storage area network ("SAN"). BVS was unhappy with its existing SAN from manufacturer ECM due to the poor customer service that BVS thought ECM provided. BVS began looking for a new SAN solution that would store electronic data from BVS's Cedar Rapids location and regularly copy the data to BVS's disaster recovery site in Omaha.

BVS contacted CDW in the fall of 2010 to discuss options for a SAN solution. After discussing options with BVS's information technology manager, CDW set up a conference call with representatives from NetApp, Inc. ("NetApp") to begin developing the SAN solution. Representatives from NetApp also traveled to Cedar Rapids to meet with BVS employees. CDW did not rely on its own solution architects but instead relied on NetApp and Arrow Electronics, Inc. ("Arrow") to architect and implement BVS's SAN solution.

BVS received the NetApp goods listed on the invoice. Arrow hired TSSLink, Inc. ("TSSLink") to perform the Arrow provisioned services listed on the invoice, which included installation and implementation of the SAN system. Arrow first proposed installing and implementing the system from January 27, 2011 to January 28, 2011. BVS declined to have the installation done during the proposed dates, and the installation was rescheduled for March 1, 2011 to March 3, 2011. Arrow provided the Arrow provisioned services from March 1, 2011 through March 3, 2011. Between March 3, 2011 and May 2011, TSSLink made several attempts to complete the installation and implementation of the SAN system, including several conference calls and web-based troubleshooting sessions.

On April 14, 2011, BVS sent an email to CDW, expressing frustration that the SAN system was not fully implemented and functioning properly. In response, NetApp offered to send a NetApp engineer to Cedar Rapids to get the system working. BVS declined NetApp's offer and, on May 19, 2011, BVS decided that the system would not be able to function properly and attempted to send the hardware and software back to CDW. However, CDW refused to take the system back.


A. Applicable Law

The admissibility of expert testimony, even when the federal court is sitting in diversity jurisdiction, is governed by Federal Rules of Evidence 104(a) and 702. Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589, 592 (1993); see also Unrein v. Timesavers, Inc., 394 F.3d 1008, 1011 (8th Cir. 2005) ("[T]he admissibility of expert testimony in diversity cases is governed by federal law....").

Before the court will admit expert testimony, it must determine that the expert witness, pursuant to Rule 104(a), "is proposing to testify to (1) scientific knowledge that (2) will assist the trier of fact to understand or determine a fact in issue." Daubert, 509 U.S. at 592. In addition to "scientific" knowledge, the United States Supreme Court has stated that this "gatekeeping" inquiry extends to "technical" and "other specialized" knowledge. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141 (1999) (quoting Fed.R.Evid. 702) (internal quotation marks omitted). Essentially, the proponent of expert witness testimony must convince the court, by a preponderance of the evidence, that the proposed expert witness's testimony is both relevant and reliable. See Daubert, 509 U.S. at 592 n.10 ("[Rule 104(a)] matters should be established by a preponderance of proof."); Wagner v. Hesston Corp., 450 F.3d 756, 758 (8th Cir. 2006) ("[T]rial courts must serve as gatekeepers to insure that proffered expert testimony is both relevant and reliable.'") (quoting Anderson v. Raymond Corp., 340 F.3d 520, 523 (8th Cir. 2003)).

Under Rule 702, evidence is relevant if "the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue." Fed.R.Evid. 702(a). "Courts should resolve doubts regarding the usefulness of an expert's testimony in favor of admissibility." Marmo v. Tyson Fresh Meats, Inc., 457 F.3d 748, 758 (8th Cir. 2006); see also Arcoren v. United States, 929 F.2d 1235, 1239 (8th Cir. 1991) ("Rule 702 is one of admissibility rather than exclusion.").

Relevant evidence is reliable if "the proponent of the expert testimony... show[s] by a preponderance of the evidence both that the expert is qualified to render the opinion and that the methodology underlying his [or her] conclusions is... valid." Marmo, 457 F.3d at 757-58. An expert witness may be "qualified as an expert by knowledge, skill, experience, training, or education." Russell v. Whirlpool Corp., 702 F.3d 450, 456 (8th Cir. 2012) (quoting Fed.R.Evid. 702). If the expert's testimony is relevant and the expert is qualified, the expert may "testify in the form of an opinion or otherwise" if "the testimony is based on sufficient facts or data... [, ] the testimony is the product of reliable principles and methods... and... the expert has reliably applied the principles and methods to the facts of the case." Id. (quoting Fed.R.Evid. 702).

The Supreme Court has identified a number of factors that courts should consider to determine if an expert's theory or technique has used reliable methodology, including: (1) whether it has been tested; (2) whether it has been subjected to peer review or publication; (3) whether it has a known or potential error rate; and (4) whether it is generally accepted in the relevant scientific or technical community. Daubert, 509 U.S. at 593-94. The court may also consider whether the opinion was developed in preparation for litigation and whether the expert can rule out alternative explanations. Lauzon v. Senco Prods., Inc., 270 F.3d 681, 687 (8th Cir. 2001). However, these factors are not "definitive, " and a "trial judge [has] considerable leeway in deciding in a particular case how to go about determining whether particular expert testimony is reliable." Kumho, 526 U.S. at 151-52. Moreover, the "evidentiary inquiry is meant to be flexible and fact specific, and a court should use, adapt, or reject Daubert factors as the particular case demands." Unrein, 394 F.3d at 1011.

"There is no single requirement for admissibility as long as the proffer indicates that the expert evidence is reliable and relevant." Id. Moreover, the court should exclude an expert's opinion only if that "opinion is so fundamentally unsupported that it can offer no assistance to the jury." Bonner v. ISP Techs., Inc., 259 F.3d 924, 929-30 (8th Cir. 2001) (quoting Hose v. Chi. Nw. Transp. Co., 70 F.3d 968, 974 (8th Cir. 1996)). After all, "[v]igorous cross-examination, presentation of contrary evidence, and careful instruction ...

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