Fraud Examination Expert Witness’ Testimony About the Effect of Misappropriated Trade Secrets Excluded
Posted on October 1, 2024 by Expert Witness Profiler
This case stems from a trade secret dispute between University of Mississippi Medical Center (“UMMC”) and Defendant Dr. Spencer Sullivan, a former employee of UMMC.
The Court has resolved the issue of liability through its Order granting default judgment in favor of Plaintiff. The injury pleaded by UMMC is the loss of certain specific former UMMC hemophilia patients who transferred their medical treatment, including pharmacy services, to Mississippi Center for Advanced Medicine (“MCAM”) as a result of Defendants’ use of UMMC’s trade secrets. As it stands, it is conclusively established that MCAM’s misappropriation of UMMC’s trade secrets proximately caused those patients to leave UMMC for MCAM, and UMMC must now prove the amount of damages that naturally flow from those patients. The parties agree that the scope of damages is the only issue left to be tried.
Plaintiff specifically moves to exclude “all of Justin Blok‘s opinions and testimony that are based on the rejected causation standard and that ignore the effect of the default judgment and other irrelevant opinions that touch upon liability.”
Fraud Examination Expert Witness
Justin Blok has testified in a variety of litigation matters involving patent, trademark, and copyright infringement, theft of trade secrets, breach of contract, business valuation, bankruptcy, fraud, business interruption, personal injury, wrongful death, and wrongful termination. He has testified on
behalf of both Plaintiffs and Defendants in the analysis and determination of economic damages, including lost profits, reasonable royalties, price erosion, unjust enrichment, diminution of value and insolvency analyses, valuation, and pre- and post-judgment interest.
Discussion by the Court
UMMC argued that portions of Blok’s report assumed Defendants were liable but did not correctly reflect the finding of liability established by this Court’s Order granting default judgment.
Defendants contended Blok’s relevant testimony included “whether misappropriated trade secrets were legally available after a certain date, whether trade secrets were involved in certain patient interactions, the effect (if any) trade secrets had on Defendant MCAM’s pharmacy operations, and the like.” Defendants also stated that “Blok’s damages calculations are based, in part, on when MCAM legally obtained access to the trade secret information through uView or patient release forms.” Accordingly, Defendants argued that the Court should not preclude Blok from testifying as to the point at which Plaintiff’s damages no longer naturally flow from Defendant’s liability.
UMMC’s reply emphasized that it did not seek to exclude Blok’s entire testimony but only the portions unrelated to damages. Plaintiff specifically referenced areas including whether the misappropriated trade secrets were legally available after a certain date, whether trade secrets were involved in certain patient interactions, and the effect trade secrets had on Defendant MCAM’s pharmacy operations.
UMMC argued that each of these categories relate to causation for liability and not damages calculations. Plaintiff instead submitted that the current relevant areas include testimony relating to “alleged overstatement of MCAM’s gross profits, no analysis of MCAM’s actual reported operating profits, no analysis of MCAM’s clinic revenues or costs, or no analysis of certain pharmacy costs.”
The Court held that while Defendants can still present evidence relevant to the appropriate damages calculation period, Defendants have not shown how the challenged areas of Blok’s testimony will help the jury determine the available damages in this matter.
Held
The Court granted Plaintiff’s motion to exclude the challenged areas of Justin Blok’s testimony.
Key Takeaway:
Blok provided testimony relating to “whether misappropriated trade secrets were legally available after a certain date, whether trade secrets were involved in certain patient interactions, the effect (if any) trade secrets had on Defendant MCAM’s pharmacy operations, and the like.” However, the current relevant areas include testimony relating to “alleged overstatement of MCAM’s gross profits, no analysis of MCAM’s actual reported operating profits, no analysis of MCAM’s clinic revenues or costs, or no analysis of certain pharmacy costs.
Case Details:
| Case Caption: | The University Of Mississippi Medical Center V. Sullivan Et Al |
| Docket Number: | 3:19cv459 |
| Court: | United States District Court for the Southern District of Mississippi, Northern Division |
| Order Date: | September 9, 2024 |
