Sunday, November 16, 2008
Tortious Interference Gives You Wings: Court Finds Expert Testimony Admissible On Only 1/3 Of Counts In Case Against Red Bull
The recent opinion of the United States District Court for the Western District of Kentucky in Western Kentucky Coca-Cola Bottling Co., Inc. v. Red Bull North America, 2008 WL 4876520 (W.D.Ky. 2008), reveals that, to be admissible under Federal Rule of Evidence 702, expert testimony must be both reliable and relevant.
Red Bull was based upon the termination of a distributorship agreement between Western Kentucky Coca-Cola Bottling Company, Inc. (“WKCC”) and Red Bull. Under that agreement, WKCC became a distributor within Kentucky of beverage products produced by Red Bull. WKCC alleged, however, that Red Bull (1) wrongfully terminated the agreement because it did not provide WKCC with reasonable notice of termination; (2) was unjustly enriched by WKCC's services in connection with the agreement; and/or (3) tortiously interfered with the agreement when it began distributing Red Bull Products.
WKCC sought to have expert witness Robert Taylor testify that Red Bull's actions caused WKCC $8,968,784 in lost profits, but Red Bull moved to strike Taylor because his testimony was irrelevant. And as Meatloaf warbled, "Two out of three ain't bad."
You see, WKCC correctly argued that lost profit damages are not allowed in Kentucky in either a reasonable notice action or an unjust enrichment claim. Therefore, because Taylor's testimony did not "hav[e] any tendency to make the existence of any fact that [wa]s of consequence to the determination of the action more probable or less probable than it would be without the evidence," the court properly found Taylor's testimony on these claims irrelevant and inadmissible under Rule 401/Rule 702. Conversely, the court found that lost profit damages are allowed in Kentucky for tortious interference claims, meaning that Taylor's testimony was relevant, at least for that claim.