Summary: Economics Expert Witness testimony is not allowed because the plaintiff did not show that the expert’s adoption of the ADT Model and Mangum’s Representative Industry Model was reliable.
Facts: This case (ADT LLC, et al. v. Vivint Smart Home, Inc., et al – United States District Court – Southern District of Florida – May 19th, 2023) involves numerous claims: unfair competition in violation of the Lanham Act, common law unfair competition, trade slander/commercial disparagement, and tortious interference with advantageous business relationships. The plaintiff, ADT, alleges that the defendant, Vivint Smart Home misled ADT customers through false sales tactics, such as switching out ADT equipment for Vivint and by telling the customer that ADT has been bought out and vivid is taking over their accounts. The plaintiffs hired Economics Expert Witness Dr. Eric Matolo to provide testimony their behalf. The defendant filed a motion to exclude this expert from providing an expert witness opinion.
Discussion: Vivint argued that Dr. Matolo’s expert witness opinion should be excluded for three reasons: 1) Dr. Matolo’s adoption of the ADT Model is not reliable; 2) His adoption of Mangum’s Representative Industry Model is not reliable; and 3) Dr. Matolo has not applied either model to the facts of the case.
The court first noted that Vivint agreed that forced royalty rates can be utilized to measure damages in some Lanham Act cases. However, Vivint does argue that the way that Dr. Matolo came up with his damages opinions makes his expert witness opinion unreliable.
Vivint stated that Dr. Maholo’s opinions about the ADT Model should be excluded because he wholesale adopted the conclusions from an unknown person at ADT and did not perform any analysis of his own. The court noted that the plaintiffs did provide the ADT Model to Matolo, but he didn’t go over the underlying data and did not verify any of the numbers or components of the Model. The court also stated that Dr. Matolo just took the piece of paper from ADT and “plopped it into his report”, which is not compatible with Daubert requirements.
Vivint also argued that Dr. Matolo’s expert witness opinion about the representative dealer revenue sharing model should be excluded because it has not been tested, was not subjected to peer-review, and is not accepted in the scientific community. The judge opined that ADT did not address this argument in its reply, which, in essence, concedes the point. The court ruled that ADT did not defend their argument; thus it will exclude Dr. Matolo’s opinion on this point as well.
Last, the court stated that it will not be necessary to opine on the third argument because Dr. Matolo will not be providing an expert opinion on a royalty rate.
Conclusion: The motion to exclude the expert witness opinion of Dr. Eric Matolo is granted.