tiffdll - michael ian shamoseuro.ecom.cmu.edu/program/law/08-732/evidence/mikesdaubert.pdf ·...

2:00-cv-71729-JCO Doc # 176 Filed 07/02/03 Pg 1 of 24 Pg ID 826" "., ________ _

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

MIKE'S TRAIN HOUSE, INC.,

Plaintiff, vs.

LIONEL L.L.C., ~ ~ KOREA BRASS, and ~

" ~ YOO CHAN YANG, ~ ~ Defendants.

Case No. 00-CV-71729

Judge John Corbett O'Meara

Magistrate J udgc Donald Scheer

~~==:--::--=:-:-=:::-:-:::-:::------,:::-:-=-::-:-:==::-::-::-:::-:::----• GUREWITZ & RABEN, P.C. DYKEMA GOSSETT PLLC _ ~ Harold Gurcwitz (Pl4468) Joseph H. Hickey (P4!664) ~ ~ Margaret M. Raben (P39243) Patrick F. Hickey (P36648) ;c, S 'G5 ~ Attorneys for Plaintiff Dante A. Stella (P60443) 0~~ -·

~ 333 West Fort Street Suite II 00 Attorneys for Defendant Li~.L.C.f= ~ • .-.. ~ Detroit, Michigan 4S226 39577 Woodward Avenue, ~~~00 ~ " ~ (313) 628-4740 Bloomfield Hills, MI 48304=li~ct; J11 ~ (248) 203-0555 ~p ~ ;,-11 ~ STEVENS & LEE, P.C. -.,., ,;.i U 5 Jeffrey D. Bukowski HOWARD & HOWARD ATTeRNINS, P.C. 5 Attorneys for Plaintiff C. Douglas Moran (P46205) ~ Ill North Sixth Street Attorneys for Defendants Korea Brass Co. and

Reading, Pennsylvania 19603-0679 Yoo Chan Yang g (610) 478-2215 39400 Woodward Avenue, Suite 101 ~ Bloomfield Hills, MI 48304-5151 ~ KOHN, SWIFT & GRAF, P.C. (248) 645-1483 10 Robert J. LaRocca § Attorneys for Plaintiff ~ ~ One South Broad Street, Suite 2100 S Philadelphia, Pennsylvania 19107

(215) 238-1700

DEFENDANT LIONEL L.L.C.'S MOTION IN LIMINE TO EXCLUDE EXPERT TESTIMONY OF .JEFFREY L. STEIN, PH.n.

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2:00-cv-71729-JCO Doc # 176 Filed 07/02/03 Pg 2 of 24 Pg ID 827

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Defendant Lionel, L.L.C. ("Lionel") states the following as its Motion In Limine to

Exclude Expert Testimony of Jeffrey L. Stein, Ph.D.:

I. PlaintiffMike's Train House, Inc. ("MTH") has designated Jeffrey L. Stein, Ph.D.

as an expert witness. Dr. Stein was retained to render opinions on the degree of similarity, if any,

between drawings possessed by Defendant Korea Brass, Ltd. ("Korea Brass") and nonparty

~ Samhongsa, Ltd. ("Samhongsa"). ~ ~

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2. As set forth in the attached Brief in Support, Dr. Stein's opinions arc not based

upon his experience; they arc not grounded in reliable data or the factual record, and they arc not

helpful to the trier of fact on the issues for which Dr. Stein's testimony is proffered. As a result, it

is appropriate to exclude Stein's opinions under F.R.E. 702.

3. Lionel sought concurrence from MTH in this Motion pursuant to E.D. Mich. L.R.

7.1, but such concurrence was denied.

CONCLUSION AND RRLJRF RRQURSTRD

For the above-stated reasons, stated more fully in the attached Brief in Support, the Court

should exclude the expert opinions of Jeffrey L. Stein, Ph.D., whether offered at the summary

judgment stage or at trial.

By:

Dated: July 2, 2003

Respectfully submitted,

DYKEMA GOSSETT PLLC

Jose 1-I.l-Iickey (P41664) Patrick F. Hickey (P36648) Dante A. Stella (P60443) Attorneys for Defendant 39577 Woodward Avenue, Suite 300 Bloomfield Hills, Ml 48304-5086 (248) 203-0555

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SOUTHERN DIVISION


Plaintiff, vs.

LIONEL L.L.C., ~ @ KOREA BRASS, and ' I ~

YOO CHAN YANG,



Magistrate Judge Donald Scheer

i Defendants. ,...p; g-===~~~~~~~~-----------=~~~~~==~~~b~·c~·--4@~--~~~. ~ GUREWITZ & RABEN, P.C. DYKEMA GOSSETT PJbf!Ci'i I"J

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~ Harold Gurewitz (P14468) Joseph H. Hickey (P4166~,S?~ {:: ~ Margaret M. Raben (P39243) Patrick F. Hickey (P3664~~ g 1 ~ Attorneys for Plaintiff Dante A. Stella (P60443) =i:r ::o N

~ 333 West Fort Street, Suite 1100 Attorneys for Defendant Li~.L.CtJ ~ Detroit, Michigan 48226 39577 Woodward Avenue, SU~ 300:":' ~ (313) 628-4740 Bloomfield Hills, MI 48304-5Gs6 ~ · ~ (248) 203-0555 ~ STEVENS & LEE, P.C. 5 Jeffrey D. Bukowski HOWARD & HOWARD ATTORNEYS, P.C. 5 Attorneys for Plaintiff C. Douglas Moran (P46205) ~ Ill North Sixth Street Attorneys for Defendants Korea Brass Co. and • Reading, Pennsylvania 19603-0679 Yoo Chan Yang ~ Q (610) 478-2215 39400 Woodward Avenue, Suite 101 ~ Bloomfield Hills, MI 48304-5151 ~ KOl-IN, SWIFT & GRAF, P.C. (248) 645-1483 ~ Robert J. LaRocca § Attorneys for Plaintiff

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@ One South Broad Street, Suite 2100 Philadelphia, Pennsylvania 19107 (215) 238-1700

DEFENDANT LIONEL L.L.C.'S BRIEF IN SUPPORT OF MOTION IN LIMINE TO EXCLUDE EXPERT TESTIMONY OF .JEFFREY L. STEIN, PH.D.


STATEMENT OF ISSUE PRESENTED

Should the Court strike the expert opinions of Jeffrey L. Stein, Ph.D., designated as an

expert witness by PlaintiffMikc's Train House, Inc., where Dr. Stein's opinions arc not based on

solid experience, data or methods and arc unhelpful to the trier of fact?

Plaintiff Mike's Train House would answer, "No."

~ Defendant Lionel, L.L.C. answers, "Y cs."

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STATEMENT OF MOST CONTROLLING AUTHORITY

The most controlling authorities on the admissibility of expert testimony is Federal Rule of

Evidence 702 (West, 2003) and Daubert v. Merrill Dow Pharmaceuticals, 509 U.S. 579 (1993).

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INTRODUCTION

Plaintiff Mike's Train House, Inc. ("MTH") alleges that nonparty Samhongsa, Ltd.

("Samhongsa") created design drawings in connection with Samhongsa's manufacture of products

for MTH. MTI-I claims that Defendant Korea Brass, Ltd. ("Korea Brass"), Lionel's supplier in

Korea, or Korea Brass' subcontractors, acquired certain of these drawings and used them to

~ manufacture products for resale by Defendant Lionel, L.L.C. ("Lionel") in the United States. § ~ ~ ~ ~ g ~ ~ ~ ~

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MTH has retained Jeffrey L. Stein, Ph.D., a professor of engineering at the University of

Michigan, to (I) "independently" analyze drawings possessed by Samhongsa and Korea Brass in

an attempt to determine similarities between drawings and to (2) evaluate the work of Dr. Lee, a

witness in the Korean proceedings involving Samhongsa, Korea Brass, and Korea Brass's

employees and design subcontractors. Stein has testified and is expected to testify(!) that using

his methods of comparison, there arc similarities between Korea Brass and Samhongsa drawings

and (2) that using a statistical analysis, he would agree with Dr. Lee's assessment of a larger set of

drawings possessed by those two companies. Stein has also prepared two drafis of a report

containing those conclusions. Lionel expects MTH to attempt to introduce Stein's opinions in

opposition to Lionel's pending motion for summary judgmcnt. 1

Although Dr. Stein may be a highly credentialed professor of mechanical engineering, his

8 opinions cannot assist the trier of fact in resolving MTH's claims against Lionel. First, in his

@ Q "independent" analysis of drawings, Stein docs not work from sound facts and methods. Second,

his evaluation of Dr. Lee's work and his adoption of Lee's conclusions is MTH's attempt to admit

1 Lionel's motion for summary judgment is based on legal issues completely independent of any similarities in drawings. Thus, even if Stein's data, methods and conclusions were proven sound, and even if he found I 00% similarity in Korea Brass and Samhongsa drawings, it would not affect the outcome of Lionel's motion.

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Lee's report through an evidentiary "back door."2 There is no evidence that Lee's work has any

reliable evidentiary or methodological foundation. Finally, his opinions- in both roles- arc not

helpful to the trier of fact. For these reasons, Dr. Stein's opinions- whether embodied in his

report or in his testimony- should be excluded.

ARGUMENT

FEDERAL RULE OF EVIDENCE 702 REQUIRES THAT EXPERT TESTIMONY BE RELEVANT AND RELIABLE.

A. Rule 702 Requires That Expert Testimony Be Relevant, Reliable and Helpful to the Trier of Fact.

Federal Rule of Evidence 702 provides that expert testimony may be admitted only in

carefully-controlled circumstances:

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 (I) 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.

~ F.R.E. 702, as amended on December 1, 2000 (West, 2003).3

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Prior to current Rule 702, Daubert v. Merrill Dow Pharmaceuticals, 509 U.S. 579 (1993),

had translated the older Rule 702's provisions into an identical "gatckccping" obligation for the

trial court. Daubert imposed these requirements because "Federal Rules 702 and 703 grant experts

2 Dr. Lee's report, which was filed in connection with Korean legal proceedings, in which Lionel was neither a party nor had an opportunity to cross examine him, is hearsay without an exception. IfMTH wished to introduce Dr. Lee's report, it should have done so by designating him as an expert and offering him for deposition.

3 According to the Advisory Committee, "The amendment affirms the trial court's role as gatekeeper and provides some general standards that the trial court must usc to assess the reliability and helpfulness of proffered expert testimony." Advisory Committee Notes to 2000 Amendment to F.R.E. 702 at 30 (West, 2003). The Advisory Committee notes make it clear that the amendment was made to confirm principles developed by case law, not to displace it. !d.

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testimonial latitude unavailable to other witnesses on 'the assumption that the expert's opinion will

have a reliable basis in the knowledge and experience of his discipline."' Kumho Tire Company.

Ltd. v. Carmichael, 526 U.S. 137, 148 (1999). The Kumho Tire Court concluded that Rule 702

"establishes a standard of evidentiary reliability," requiring a "valid connection to the pertinent

inquiry as a precondition to admissibility." It noted that:

[W)hcrc such testimony's factual basis, data, principles, methods, or their application arc called sufficiently into question, the trial judge must determine whether the testimony has a "reliable basis in the knowledge and experience of [the relevant] discipline.

~ I d. at 1175 (emphasis added and internal citations omitted). F.R.E. 703, the companion to

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F.R.E. 702, also requires an expert's underlying data to be of a type reasonably relied upon by

experts in the field if it is not in itself admissible.

B. As Gatekeeper, the Court Must Exclude Expert Opinions Based On Speculative, Faulty, or Unsupported Assumptions.

Federal courts recognize several circumstances in which it is appropriate to exclude expert

opinions on evaluation of the assumptions behind them. First, expert opinions cannot be based on

subjective belief or unsupported speculation. Sec, Q.,&. General Electric Co. v. Joiner, 522 U.S.

136, 140 (1997); §££also Eastern Auto Distributors. Inc .. v. Peugeot Motors of America. Inc., 795

F.2d 329,337 (4th Cir. 1986). Second, it is appropriate to exclude expert opinions which arc

based on unrealistic, contradictory, or incorrect assumptions. Sec.£,.&, Shatkin v. McDonnell

Douglas Com., 727 F.2d 202, 207 (2d Cir. 1984); sec also Guillory v. Domtar Industries, Inc., 95

F.3d 1320, 1331 (5th Cir. 1996). Finally, where the foundational facts demonstrating the

relevance of the expert opinion arc not established, it is appropriate to exclude that opinion. Sec,

e.g., Trevino v. Gates, 99 F.3d 911,922-923 (9th Cir. 1996).

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II. DR. STEIN'S EXPERT REPORT AND TESTIMONY SHOULD BE EXCLUDED UNDER F.R.E. 702 AND F.R.E. 403.

Dr. Stein's opinions, his methods, and his underlying data do not meet the stringent

requirements ofF.R.E. 702.

(a) Dr. Stein has no expertise in evaluating model locomotive drawings. His entire knowledge of model train design was provided to him by MTH employees, specifically John Adelsberger, Dave Krcbhcil, and Mike Wolf;

(b) Dr. Stein relics upon data that was arbitrarily selected (by MTH's counsel) from information that had been arbitrarily selected by Dr. Lee;

(c) Dr. Stein's "independent analysis," to the extent that it docs not adopt Lee's methods, adopts arbitrary and unsupported assumptions and applies them to facts not in evidence; and

(d) Dr. Stein's analysis is not useful to the trier of fact because (1) it returns false high scores of similarity; (2) usurps the Court's role in determining issues oflaw and merely serves as a mouthpiece for MTH's factual contentions; (3) is based on data unconnected to MTH's claims against Lionel; (4) is a speculative as it relates to Dr. Lee; (5) and cannot support a finding of misappropriation by any defendant.

~ Far from serving the intended purpose of expert testimony and reports, Dr. Stein's opinions have a , • s 5 ~

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potential for confusing the trier of fact, distorting the factual record, and serving as a conduit for

the admission of the report of Dr. Lee, an individual not named as a witness by MTH (whether lay

or fact) and whose qualifications and methods could not and cannot be tested in these proceedings.

A. Dr. Stein's Only Knowledge of Model Locomotive Design Came From Discussions With MTH and Its Counsel.

Dr. Stein has no background in the manufacture of model locomotives. He has never

designed a model train. Sec Stein Dep., Exh. A, at 63. His knowledge of the products in this case

was imparted to him by MTH personnel. John Adelsberger, a former MTH Project Manager,

testified that he educated Stein during a trip to Ann Arbor, Michigan aficr this case commenced.

According to Adelsberger, the visit was

[a]lmost an elementary education of hey, here's a toy train, here's a book with a real train, this is what you're really looking at, this is a stcamchcst, that's a

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stcamchcst. It was more along that [sic]lines than it was a coaching oflook, this is what I found, and this is why I found it. I mean, he was having a hard time just coming initially to the grips of what he was looking at.

Adelsberger Dcp., Exh. B, at 209. Mr. Adelsberger also professed to have taught Stein about the

alleged "design signatures" ofSamhongsa designers. Jd. at 212-213. Stein also spoke to David

Krcbhcil and Mike Wolf, both ofMTH. Sec Stein Dcp. at 70. Stein reported having an additional

~ conference call with MTH and its counsel a few days before the continuation of his deposition. ~ ~ ; ~ " ~ ~ i ~ ~ ~

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Sec Stein Dcp., Exh. A, at 262. Stein's opinions arc dependent on infonnation provided to him by

MTH, creating a significant danger of his "rubber-stamping" MTH's contentions.

B. Dr. Stein's Report is Not Based On Information Which Is Admissible, Reliable, or Reasonably Relied Upon In His Field.

In his report filed with the Korean civil court on 11/22/2001, Dr. Lee analyzed 3,307

drawings purportedly possessed by Samhongsa, Korea Brass, and Korea Brass's subcontractors.

Sec Lee Report, Exh. C, at M05833 (excerpt). Lee's set of drawings, or more precisely its

selection, has three characteristics which call its reliability as a sample of drawings relevant to this

case into serious question:

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There is no discussion of the precise origin of the drawings, other than that there were "Two Compact Discs containing the design files for model trains," "25 design draft binders for model trains," "one computer disk containing a model train design file," and "27 design draft binders for model trains." M05833. To Lionel's knowledge, there is no witness named in this case who could authenticate the Samhongsa drawings.

There is no clear indication of how Dr. Lee matched particular drawings for comparison. In fact, it appears from the face of Dr. Lee's report that Samhongsa created the comparison lists and presented them to Lee. M05834 ("The Defendants have reviewed and acknowledged this list that was submitted by the Plaintiff."). It is unknown whether Samhongsa played any role in creating the population of3,307 drawings.

Lee purposefully rejected comparing any parts which would by their very nature be similar (such as subcontracted parts). Lee provided no basis for his dctcnnination of which parts should be included and which should be excluded.

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Exh. C, M05833-M05834. Lionel has had no opportunity to cross-examine Lee on the origins of

the drawings, the method for selecting pairs, or what classes of drawings Lee excluded and why.

As a result, Lee's drawing set is a veritable "black box" with no indicia of being a reliable sample.

From this brackish well, Stein drew at least 110 of the 167 drawing pairs he examined. Sec

Stein Dcp., Exh. A, at 61. This figure (220 to 334 drawings) comprise only between 6 and 1 oo;., of

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evaluation- suffers from many problems related to their selection and thus reliability:

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As described above, Stein relics on Lee's initial selection of drawings and Samhongsa's pairings of drawings for 110 drawing pairs (66% ofhis "independent" analysis).

Stein did not know where the remaining 57 drawings came from, admitting that they may also have been from Lee's set. Sec Stein Dcp. at 61-62.

Stein acknowledged at his deposition that all 167 drawings were selected and provided to him by MTH's counsel. !d. at 62. There is no indication of how these drawings were selected, and there will be none. At any rate, there is no indication that any reliable or accepted method was used to subsamplc the Lee drawings.

Stein himself admits in his revised report that his independent analysis assumes that the "162 [pairs]do not represent a biased sample from the entire set" and "that the sample was randomly drawn from the entire set." Sec Stein 5/8/2003 Report at 8, 10 .

Stein himself admits that "It is also true that the set of97 drawings that I was given is statistically not a random sample of the drawings evaluated by Dr. Lee ... " Stein 12/9/2002 Report at 14. The exact same statement (abcit describing 97 pairs) appears on the same page of his revised 5/8/2003 Report.

Given that one purpose of Stein's report is to report- at a 95% confidence interval (a low and high

range defined by certainty)- the likelihood that Stein would agree with Lee's results (and

therefore whether Stein would adopt Lee's conclusion), the quality ofsubsampling is crucial to the

4 There is a variance between Stein's initial report (12/9/2003, Exh. D) and deposition testimony (in which he described comparing 167 pairs of drawings and his revised report (5/8/2003, Exh. E), in which he discussed 162 pairs of drawings). For the reasons set forth in this brief, the issues arc the same whether the figure is 162 or 165 pairs.

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reliability of Stein's opinions. MTH has named no statistical expert to evaluate the validity of a

sample Stein reviewed, a sample which was apparently taken by MTH's counsel.

C. Stein's Opinions Apply Arbitrary, Unsupported Assumptions and Methods to Facts Not In Evidence.

As Dr. Stein's report itself reflects, Stein used some criteria for comparing model

locomotive designs developed or used by Dr. Lee in the Korean action.5 Lionel has not had an

e ~ opportunity to cross-examine Lee on this methodology, both because Lee is not an expert in this ~ ~ action and because Lionel was not a party to the Korean proceedings. To the extent that Stein

~ ~ draws from Lee, to accept Stein's opinions, the trier of fact must blindly accept Lee's comparison

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criteria. Amazingly, Stein relics on Lee for data and some methods, despite not even knowing

what Lee's qualifications are.6 Lionel believes for the same reasons Lee's report should be

excluded from evidence, Stein's should be excluded.

In his report, Dr. Lee purported to determine how many Samhongsa drawings were directly

copied by Korea Brass (or its design subcontractor), how many Samhongsa drawings were used as

references by Korea Brass or its subcontractor, and how many drawings showed no matches.

There is no indication in the records from Korea of how Lee developed his methods for comparing

drawings. Stein himself notes that:

Dr. Lee docs not provide the data showing the numerical value of each criterion assigned to each drawing pair, nor docs he provide a quantitative description of how he combines all of the criteria to arrive at a total score or rating.

5 Interestingly, although Stein describes using a student insulated from Lee's results to §£Q!Q drawings using Stein's criteria, there is no indication that Stein was insulated from Lee's methods when he was selecting the criteria.

6 Stein's opinions arc based on the work of a person for whom "I mean, I don't specifically know what his qualifications arc, but it docs say Dr. Lee, so I'm assuming that has the similar meaning as the word doctor before my name in mechanical engineering." Stein Dcp., Exh. A, at 59.

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Stein 5/8/2003 Report, Exh. E, at I 0. In addition, Lee's criteria~ which largely relate to qualities

of design files, not the contents of the drawings themselves, arc at best speculative.'

Dr. Stein's own "independent analysis" hinges on multiple criteria similar to those of Dr.

Lee, assigning to each a weight based on Stein's "professional experience." Sec Stein Dcp. at 142-

143. There is no indication that Stein's criteria and weighting arc commonly-accepted in his field,

~ and Stein acknowledges that at least 13 of his 21 criteria for comparison (including the two most ~ ,

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heavily-weighted) could be affected by industry standards, the training and preferences of a single

designer working for two companies, and/or the usc of common design software.

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Drawing titles (weight= 2) can be influenced by the same designer designing similar products at two different employers. Sec Stein Dcp. at 118-119. They arc also influenced when parts have common names, such as "floor." !d. at 139.

Drawing numbers (weight = 2) could be carried over by an employee leaving one company and starting work for another. I d. at 121.

Drawing scale (weight= I) "can often be a designer choice." !d. at 121.

A designer may usc the same datum (origin point for measurements, weight = I) when designing the same product at different employers, especially on parts with many dimensions. Jd. at 121; 152.

Subdrawing location could be a matter of a designer's personal preference. Id. at 123.

Equal tolerance numbers (weight= I) could be similar or the same because two companies "might both have the same tolerance because they know it is critical that it be kept or held in a certain value." !d. at 160-161.

Dimension locations (weight= I) would be affected by the usc of a common design program (here, AutoCad) being used for two different drawings. !d. at 126.

7 Dr. Lee's report contains minimal information describing the basis of his opinions other than the fact that he compared (a) the time the drawing files were made; (b) the file name and design number; (c) the number of file layers and the color index; (d) the distance and arrangement of projected images; (c) the distances from edges to projected images; and (f) the measures and locations of measures. There is no indication that Lee took into account the effect of having the same designer make a drawing of a similar part at two different employers, or the effect of using software templates and common design software. Sec Ex h. C at M05833-M05839.

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• Label feature (weight =I) could be affected by having the same designer creating subsequent similar designs. !d. at 126-127.

• Color schemes ( 4 criteria, each weighted 0.25) could be the product of an individual designer's preferences or his usc of defaults stored on his own computer. !d. at 128.

There is no indication that Stein took the possibility of a common designer (here, Aim and another

designer) with a long history of designing model trains (11 years for Aim) into account when

~ creating and weighting these criteria. Finally, Stein's criteria do not take into account §

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dissimilarities (including content) in drawing pairs. Sec Exh. A at, e.g., 261 (ignoring

dissimilarities in weighting because the study "measures the similarities," not dissimilarities).

Stein's work is thus questionably reliable as an indicator of whether Korea Brass or someone

acting on its behalf used Samhongsa infonnation.8

D. Dr. Stein's Methodology Does Not Lead to Results Which Are Helpful to the Finder of Fact.

The acid test of Dr. Stein's opinions is whether or not they can assist the trier of fact in

dctcnnining whether or not Korea Brass possessed drawings that were similar to those possessed

by Samhongsa. Unless it can be demonstrated that Dr. Stein's methods arc helpful in dctennining

whether the content of the drawings is similar (a fact weB within the grasp of the finder of fact)

and that one is derived from another (a task Stein was not asked to carry out), then Stein's opinions

arc of no value of the finder of fact.

8 The reliability of Stein's work- which relics heavily on statistics to reach its conclusions- is further strained by Stein's delegation ofa11 data processing and statistical analyses- the entire basis of his evaluation of Lee- to his research assistant, who was not listed as an expert witness. Sec Stein Dcp., Exh. A, at 266, 269. Like Dr. Lee, the source of the raw data, Dr. Gillespie, as the party actua11y undertaking the statistical analysis, should have been offered as an expert if MTH intended to introduce her work. The other behind-the-scenes "expert" was an unnamed "doctoral student in Mechanical Engineering under [Stein's] direction." This student was in fact the party who scored the drawings using the criteria developed by Stein and described in his report. Sec Stein 5/8/2003 Report at 8.

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I. Dr. Stein's Methods Lead to False Positives Which Could Confuse the Finder of Fact.

In one example, which occurred in Stein's drawing pair 120 in his 12/9/2002 report and

which was explored at his deposition, Stein compared drawings that were allegedly for Samhongsa

and Korea Brass subscalc Challenger locomotives. Both drawings were titled, "Floor." Using his

criteria, Stein determined that:

• The drawings had the same title. This was assigned a weight of 2 .

• The drawings had the same scale .

• The drawings had the same number of subdrawings

• The drawings had the same location for subdrawings .

~ ~ According to Stein's report, this led to his conclusion that the drawings were 37.8% similar. Sec @

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Stein 12/9/2002 Report, Exh. D, at Appendix V, page 4 The problem, as Stein himself

acknowledged, is that they were not drawings of the same part. Sec Stein Dep. at 158. In fact,

one was the "floor" of a locomotive while the other was the "floor" of a tender. Sec Ex h. F

(Samhongsa drawing oflocomotivc floor) and Ex h. G (Korea Brass drawing of tender floor).

Stein subsequently corrected this problcm9 and others, but this example shows how with Stein's

scoring criteria, pairs can achieve scores approaching Stein's 50% threshold without even being

depictions of the comparable parts. 10

9 Following the examination on drawing pair 120, the parties adjourned Dr. Stein's deposition and resumed it following the issuance of his 5/8/2003 revised report. Stein replaced the Samhongsa drawings for pairs 118, 120, and 122-128 to create what he thought were "better pairs" (Exh. A at 192). He then repeated his analysis. Sec Exh. Eat "Changes to April 17, 2003 Report."; Exh. A at 188-189. Originally, these pairs had scores of 14.29, 37.33, 52.35, 21.77, 41.73, 44.05, 78.57, 67.10, and 61.87%, respectively. Sec Exh. D at Appendix V, page 4. In addition to making changes to these pairs, Stein deleted drawing pairs 14, 42, 80, I 04 and Ill. Sec Exh. E, above. The deleted pairs had scores of 8. 70, 8.00, 58.20, 42.86, and 58.73%. Sec Exh. D at Appendix V, pages 3-4.

10 Using Dr. Stein's methodology and weighting, any two drawings with the same title (such as the Scale K-4 "Smoke box door," a feature of many model steam locomotives) and the

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Dr. Stein's superficial methods measure the external aspects of a design, rather than

attempting to examine their contents or origin. If similar methods were used to two compare two

pieces of correspondence, two letters which had the same margins, same date, same number of

paragraphs, and the same typeface and ink color) could be considered similar enough to be

"copies"- even if one was a love letter and the other was a debt collection letter.

2. Dr. Stein's Opinions Are Outside the Scope of His Retention and Usurp the Role of the Court and the Trier of Fact.

Dr. Stein's opinions contain unsupported statements supplanting the roles of both the trier

~ of fact and the Court. Dr. Stein's report goes beyond comparing the drawings and moves on to

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! • I ~ §

~ i5

areas even farther from his area of expertise. In Section 2 of his report (both versions), Stein

assumes that:

... the design drawings of the trains listed in Table !...all of which arc owned by Mike's Train House (MTI-I and Lionel).

In Section 2.1, Stein opines that:

[I]t is my professional opinion that that design drawings have great independent economic value and that they arc closely held trade secrets. Any competitive advantage a company might have by bringing better products to market sooner would be lost if its drawings were public information .

Stein 5/8/2003 Report, Exh. E, at 3. In Section 4, Stein opines that:

Thus, in my professional opinion, the [Korea Brass] drawings contain trade secrets for 16 of the [Samhongsa] trains evaluated by Dr. Lee and me. Finally, it is my professional opinion that usc ofthc [Korea Brass] drawings that arc copies to manufacture model trains provided a clear and distinct competitive advantage in the design and manufacture of those trains.

same number drawing per sheet (whether or not it is the same drawing) will return a score of 25.58%. Sec Stein 12/9/2002 Report, Exh. D. at Appendix V, page 4, item 156. Similarly, the Baby K-4 "Number Plate Base," which between the two drawings had only positives for the same number of sub-drawings and their positions on the sheet in common under Stein's test achieved a score of22.38%. !d. at page 3, item 110. '

11


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I ~ ~ ~ <

~ ~ , ~ ~

Stein 5/8/2003 Report, Ex h. E, at 14. These statements were not within the scope of Stein's

retention, have no factual basis supporting either statement, and in fact contradict the law of trade

secrets:

• Dr. Stein has no knowledge of the model train industry- except that which MTH gave him- such to make conclusions about the competitive value of drawings or their status as trade secrets.

•

•

•

•

MTH's ownership of designs at any point prior to May 2002, as Lionel points out in its summary judgment papers, is far from an established fact.

Dr. Stein explicitly stated at his deposition that"! didn't make a study of trying to determine how a set of drawings might be determined, in particular the Lionel drawings might be determined to be in some way misappropriated or containing trade secrets. I wasn't asked to do that." Stein Dcp., Exh. A, at 169.

Dr. Stein is not an economist, nor is there any indication that he has ever studied the sequence, timing or economic consequences of the parties' various product releases. As a result, he is not in a position to pronounce on alleged "competitive advantage." His statement that the drawings have economic value arc based on the fact that they arc often designated confidential during litigation. !d. at 48-50; 55.

As set forth in Lionel's summary judgment brief, courts routinely reject the idea that drawings in themselves arc trade secrets. Not only is Stein's assertion incorrect; it also runs afoul of the rule that experts arc not permitted to make conclusions oflaw.

i - Stein's opinions on trade secret law arc flatly inadmissible because they attempt to supplant the

! g role of the Court. His other opinions arc nothing more than conclusory statements designed to

~ supplant the role of the fact finder. While it is true that experts may form opinions which speak to

i ultimate factual issues, such opinions arc inadmissible unless they arc grounded in solid facts, ~

~ 6

methods, and experience. Otherwise, as here, they serve as nothing more than a mouthpiece for a

party's factual contentions, and create no more of a genuine issue of material fact than would a

self-serving, conclusory affidavit filed by a party.

12


,..- ....

3. Dr. Stein's Opinions Are Based on Comparisons of Drawings Possessed by Korea Brass Prior to the 2000 Computer Seizure.

To the extent Dr. Stein's report relics on Dr. Lee's drawing set, it is relevant only to

drawings which were confiscated from the computers of Korea Brass and its designers on February

21,2000. As set forth in detail in Lionel's summary judgment papers, there is no evidence that

Lionel knew of any potentially-wrongful activities in Korea as of that date, and there is no ~ § evidence that the equipment and paper drawings were ever returned to Korea Brass and its ~ ~ ~

I ~

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i ~ :;· , ~ § § ~ "

I " '·

I § § ~

~ i5

designers for usc in future products with Lionel's knowledge. Thus, similarities in these drawings

from the Lee set (which underlie a significant portion of Stein's "independent analysis") have no

probative value on MTH's claims against Lionel, and the prejudice they will cause to Lionel

requires their exclusion under F.R.E. 403.

4. Dr. Stein's Regression Analysis of Dr. Lee's Report is Simply a Speculative Modeling Exercise.

As noted above, the methods by which Dr. Lee sampled his data, created criteria, weighted

those criteria, and reached a final number were unknown to Dr. Stein. Dr. Stein's entire regression

analysis of Dr. Lee's work (Section 3.8) is not an evaluation llQJ: sc of Lee's methods and

conclusions, but rather an attempt to sec whether or not Stein can create a drawing-comparison

model which can mimic Dr. Lee's results, at least across the 110 (later 97) pairs of drawings he

evaluated. While Stein's results may be helpful in showing the jury that Dr. Stein is good at

"curve fitting," they do not show that Lee's methods, criteria or weighting were valid. 11 This type

11 One example of"curvc fitting," or more precisely, "curve sanding," is seen on page 11 ofboth Stein reports, in which Stein states that "The agreement is even stronger if the drawings associated with Dr. Lee's simple parts criteria arc removed." Sec Exhs. D and Eat 11. Lee's simple parts criteria eliminates drawings of simple shapes as copies, unless the shape is identical. Sec Exh. Cat M05834-M05835. Stein is more than willing to sacrifice this content-based test in favor of form-based criteria, if it supports his conclusions.

13


~'

........ ---···-·· -----------------------·

of analysis becomes even Jess useful when one considers that Stein used what he considered to be

a deficient sample set.

5. Dr. Stein Has Performed No Analysis From Which A Trier of Fact Could Infer Misappropriation.

Although Stein repeatedly uses the word "copy" to characterize the nature of components

of some of the Korea Brass drawings in his report, he has testified that he was neither asked to nor

~ attempted to actually determine which drawing was created first: ~ ~ --~ ~

~ g ~ ~ ~ ~ <

The knowledge, or the task that I was asked to do was to sec whether there were some similarities that might exist in drawing pairs, and so the time clement of when one set was produced and the other was not a consideration, it was not information that I was specifically looking for or had ... It was not in the scope of my evaluation to determine which set of drawings was created first.

Stein Dcp., Exh. A, at 78. Stein's usc of the word "copy," with no evidentiary or analytical

~ foundation, has the potential to create severe prejudice, necessitating exclusion under F.R.E. 403,

~ ~ " ~ ~

~ ! ! ~ ~

because demonstrating copying is a part ofMTH's burden of proof at trial.

CONCLUSION AND RELIEF REQUESTED

For the above-stated reasons, the Court should exclude the expert opinions of Jeffrey L.

Stein, Ph.D., whether offered at the summary judgment stage or at trial.

By:

Dated: July 2, 2003


~MA GOSSETT PLLC

--;::.

Joseph H. Hickey (P41664) Patrick F. Hickey (P36648) Dante A. Stella (P60443) Attorneys for Defendant 39577 Woodward Avenue, Suite 300 Bloomfield Hills, MI 48304-5086 (248) 203-0555

14


...


SOUTHERN DIVISION

MIKE'S TRAIN !·lOUSE, INC.,

Plaintiff, vs. Case No. 00-CV -71729

LIONEL L.L.C., Judge John Corbett O'Meara

KOREA BRASS, and Magistrate Judge Donald Scheer

~ ~ YOO CHAN YANG,

; -· Defendants. • •

~~~~~~--=-~~~=-----------~~~~~~~~~~~~~-~~·--~8=-__ -~fl & GUREWITZ & RABEN, P.C. DYKEMA GOSSETT Pf&C~ • -~ Harold Gurcwitz (P14468) Joseph 1·1. Hickey (P4166"1:!2n i-~ Margaret M. Raben (P39243) Patrick F. Hickey (P36648~~g ~ ~ Attorneys for Plaintiff Dante A. Stella (P60443) =i:t::::; ~ 333 West Fort Street, Suite II 00 Attorneys for Defendant Lio@~.L.C~ ~ Detroit, Michigan 48226 39577 Woodward Avenue, Sutl:g1300 t-.:1 ~ (313) 628-4740 Bloomfield Hills, MI 48304-50!§6 N

d (248) 203-0555 ~

! • ~

STEVENS & LEE, P.C. Jeffrey D. Bukowski Attorneys for Plaintiff Ill North Sixth Street

HOWARD & HOWARD ATTORNEYS, l'.C. C. Douglas Moran (P46205)

re

~ ~

~ 5

Reading, Pennsylvania 19603-0679 (610) 478-2215

KOHN, SWIFT & GRAF, P.C. Robert J. LaRocca Attorneys for Plaintiff One South Broad Street, Suite 2100 Philadelphia, Pennsylvania 19107 (215) 238-1700

Attorneys for Defendants Korea Brass Co. and Yoo Chan Yang 39400 Woodward Avenue, Suite 101 Bloomfield Hills, MI 48304-5151 (248) 645-1483

NOTICE OF HEARING

TO: ALL COUNSEL OF RECORD TO THE COURT:

I


PLEASE TAKE NOTICE that DEFENDANT LIONEL L.L.C.'S MOTION IN LIMINE

TO EXCLUDE EXPERT TESTIMONY OF JEFFREY L. STEIN, PH.D., will be brought on

for hearing at a time and place to be determined by the Court.

DETOI\364623.1 ID\DAST

By:


DYKEMA GOSSETT PLLC

Jose 1 H. Hickey (P41664) Patrick F. Hickey (P36648) Dante A. Stella (P60443) Attorneys for Defendant 39577 Woodward Avenue, Suite 300 Bloomfield Hills, Ml 48304-5086 (248) 203-0555

2


/'" ....

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICI-IIGAN

SOUTHERN DIVISION


Plaintiff,

vs.

LIONEL L.L.C.,

Defendant.

GUREWITZ & RABEN, P.C. Harold Gurewitz (P14468) Margaret M. Raben (P39243) Attorneys for Plaintiff 333 West Fort Street, Suite 1100 Detroit, Michigan 48226 (313) 628-4740

STEVENS & LEE, P.C. Jeffrey D. Bukowski Attorneys for Plaintiff Ill North Sixth Street Reading, Pennsylvania 19603-0679 (610) 478-2215

KOHN, SWIFT & GRAF, P.C. Robert J. LaRocca Attorneys for Plaintiff One South Broad Street, Suite 2100 Philadelphia, Pennsylvania 19107 (215) 238-1700



Magistrate Judge Donald Scheer

DYKEMA GOSSETT PLL~ Joseph H. Hickey (P4!664i:o . S Patrick F. Hickey (P366@~v; Dante A. Stella (P60443~~~ f= Attorneys for Defendant2}!§1@ L.L.C. 39577 Woodward Avencn:;~ffi.te 30~ Bloomfield Hills, MI 4830CI;W86 ~ (248) 203-0555 :::::;, r-J

="-' N

--

HOWARD & HOWARD ATTORNEYS, P.C. C. Douglas Moran (P46205)

Attorneys for Defendants Korea Brass Co. and Yoo Chan Yang 39400 Woodward Avenue, Suite 101 Bloomfield Hills, MI 48304-5151 (248) 645-1483

PROOF OF SERVICE

STATE OF MICI-IIGAN ) ) ss.

COUNTY OF WAYNE )

Marsha Ireton, an employee of Dykema Gossett PLLC, being first duly sworn, deposes

and says that on the 2nd day of July, 2003, she served a copy of NOTICE OF HEARING,


. .

DEFENDANT LIONEL L.L.C.'S MOTION IN LIMINE TO EXCLUDE EXPERT

TESTIMONY OF JEFI1REY L. STEIN, PH.D., DEFENDANT LIONEL L.L.C.'S

BRIEF IN SUPPORT OF MOTION IN LIMINE TO EXCLUDE EXPERT

TESTIMONY OF JEFFREY L. STEIN, PH.D. and this PROOF OF SERVICE upon:

Harold Gurewitz GUREWITZ & RABEN, P.C. 333 West Fort Street, Suite 1100 Detroit, Michigan 48226

Jeffrey D. Bukowski STEVENS & LEE, P.C. Ill North Sixth Street Reading, Pennsylvania 19603-0679

Robert J. LaRocca KOl-IN, SWIFT & GRAF, P.C. One South Broad Street, Suite 2100 Philadelphia, Pennsylvania 19107

C. Douglas Moran, Esq. HOWARD & HOWARD ATTORNEYS, P.C. 39400 Woodward Ave., Ste. 101 Bloomfield Hills, MI 48304-5151

by enclosing copies of the same in envelopes properly addressed, and by depositing said

envelopes in the United States Mail with postage thereon having been fully prepaid.

I declare that the statements above arc true to the best of my information, knowledge

and belief.

DETOI\297792.6 IDIDAST

2

\lrsha Ireton



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