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World Finer Foods, Inc. v. Archway Cookies

November 7, 2007

RE: WORLD FINER FOODS, INC., ET AL.
v.
ARCHWAY COOKIES, LLC.



The opinion of the court was delivered by: William J. Martini Judge

MARTIN LUTHER KING JR . FEDERAL BLDG . & U.S. COURTHOUSE 50 WALNUT STREET, P.O . BOX 419 NEWARK, NJ 07101-0419 (973) 645-6340

LETTER OPINION

Dear Counsel:

Defendant Archway Cookies, LLC ("Parmalat") brings its second motion for summary judgment, seeking dismissal of claims remaining after this Court disposed of its first motion. Parmalat argues that these claims rest upon the inadmissible expert testimony of two of Plaintiffs' witnesses, John Roberts and Chris Campos. Parmalat further argues that without this testimony, Plaintiffs have insufficient evidence to support their claims on summary judgment. This Court disagrees and finds that Plaintiffs have indeed put forth sufficient evidence for their claims to survive summary judgment. Accordingly, Parmalat's Motion is DENIED.

FACTS AND PROCEEDINGS

The facts of this case have been set forth at length in this Court's Opinion disposing of Parmalat's first motion for summary judgment. (Summ. J. Op. 1--6.) This Letter Opinion will summarize only those facts necessary for the disposition of this Motion.

At the heart of this dispute lies a contract. In December 1998 Parmalat contracted with World Finer Foods, Inc. ("WFF") to be WFF's distributor in the northeast United States of certain cookies that WFF imported from Bahlsen GmbH & Co., KG ("Bahlsen"), a German producer of cookies and other food products. (Op. 1--2; Certification of Barry Kozyra, Ex. A, Pl.s' Version of Contested Facts ¶ 2.) Under this agreement, Parmalat was obligated not only to distribute Bahlsen cookies, but also to promote them. (Pl.'s Facts ¶¶ 2, 3.) Parmalat and WFF did not memorialize this agreement in any formal way and thus did not discuss the contract's length or-more importantly-how the parties could terminate it. (Op. 2--3.) Nevertheless, the parties all agree that Parmalat and WFF had at least some contractual obligation.

The dispute arose when Parmalat repudiated and then terminated the contract. (Op. 4--6.) Without Bahlsen's permission, in December 2001, Parmalat contracted with Bahlsen's competitor, Great Brands of Europe, Inc. ("GBE"), to exclusively distribute only GBE biscuits. (Op. 4.) While WFF knew that Parmalat was distributing GBE products, WFF did not know that Parmalat had contracted with GBE to distribute only GBE products. (Op. 4--5.) WFF and Bahlsen claim that Parmalat subsequently curtailed its promotion and distribution of Bahlsen products and that WFF's and Bahlsen's profits declined as a result. (Pl.s' Facts ¶¶ 9, 10; Kozyra Certification, Ex. Q; Pl.s' Opp'n to Def.'s Mt. for Summ. J. 28--29.) WFF and Bahlsen further claim that during Parmalat's repudiation of its contract with WFF, Parmalat nonetheless assured WFF that it was performing the contract as promised. (Pl.s' Facts ¶ 11.) On September 9, 2002, Parmalat gave WFF notice that it would soon have to terminate their contract, and on October 3, 2002, Parmalat sent WFF a letter stating that Parmalat would formally cease to distribute Bahlsen products by October 20, 2002. (Op. 5.)

In response, WFF and Bahlsen sued Parmalat. (Op. 6.) Parmalat moved for summary judgment, and after this Court adjudicated that Motion, several claims remain. Accordingly, WFF now retains claims against Parmalat for breach of contract, fraudulent misrepresentation, and breach of the implied covenant of good faith and fair dealing. (Op. 1.) WFF and Bahlsen both retain claims against Parmalat for breach of fiduciary duty. (Op. 1.)

Parmalat now moves for summary judgment, seeking dismissal of these remaining claims. (Def.'s Br.) Parmalat claims that WFF's and Bahlsen's claims rest on the inadmissible testimony of two experts, John Roberts and Chris Campos. (Def.'s Br. 20--28.) Parmalat further argues that without this testimony, WFF and Bahlsen have not put forth sufficient evidence of their claims to survive summary judgment. (Def.'s Br. 20--40.)

DISCUSSION

I. The Expert Testimony of John Roberts and Chris Campos

To support their claims, Plaintiffs will seek to introduce the expert testimony of John Roberts and Chris Campos. (Ex.s O, Q to Kozyra Certification; Ex. D to Holahan Certification.) Roberts, an expert in the food distribution business, stated in a report that a party to a food distribution contract needs six months to prepare for the other party's termination of that contract and that standard food distribution contracts thus probably contain a six month notice-of-termination provision. (Ex. D.) Campos, a business expert, testified in a deposition that Parmalat's termination caused the Plaintiffs financial harm. (Ex. Q.) In forming this conclusion, Campos relied on WFF's financial statements, which showed profit losses following Parmalat's curtailment of its sales and promotion of Bahlsen products. (Ex. Q.)

Parmalat claims in its Motion for Summary Judgment that Roberts's and Campos's testimonies are inadmissible and thus inappropriate for consideration on summary judgment. (Def. Br. 20--28.) Parmalat argues that Roberts and Campos are not experts and that they have insufficient evidentiary support for their conclusions. (Def. Br. 23--28.) Parmalat also argues that Campos's testimony fails to establish a causal link between Parmalat's conduct and Plaintiffs' losses.*fn1 (Def. Br. 26.) This Court disagrees for the reasons explained below.

For expert testimony to be considered in a motion for summary judgment, it must be admissible. See In re Paoli R. R. Yard PCB Litig., 35 F.3d 717, 732--33 (3d Cir. 1994). The admissibility of expert testimony is governed mainly by Federal Rule of Evidence 702, which requires that the testimony be rendered by an expert, that it assist in the determination of a relevant issue, and that it is based on reliable evidence and methodology. See Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 589--95 (1993). More specifically, as established in Daubert and codified in Rule 702, expert testimony must have a reliable basis in the expert's knowledge and experience. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 149 (1999). ...


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