BJB ELECTRIC LP v. BRIDGELUX, INC.

Background

BJB Electric LP sued Bridgelux, Inc., alleging that Bridgelux breached a Letter Agreement. The agreement required Bridgelux either to purchase a minimum number of LED holders within four years after the product first became available, through October 2020, or to pay liquidated damages. Bridgelux counterclaimed that BJB breached the agreement by refusing to deliver more LED holders unless Bridgelux paid before delivery.

Both parties offered witnesses to calculate damages. Bridgelux offered Lawrence Leavitt, a certified public accountant, whose report addressed Bridgelux’s counterclaim damages, BJB’s damages calculation, a “time value of the profit” theory, and whether the liquidated-damages clause reflected a reasonable estimate of damages. BJB offered Albert Pruenster, BJB’s president, to testify about BJB’s lost profits and related overhead. BJB also offered a rebuttal report from Pruenster.

Legal standard

Federal Rule of Evidence 702 requires an expert witness to be qualified by knowledge, skill, experience, training, or education. Under the Supreme Court’s Daubert framework, expert testimony must be based on reliable principles and methods and must be sufficiently connected to the facts of the case. The court emphasized that questionable evidence is ordinarily challenged through cross-examination and competing evidence rather than exclusion, unless the testimony is so unreliable or disconnected from the record that it should not be admitted.

BJB’s motion to exclude Leavitt

BJB argued that Leavitt’s report should be excluded because:

- his “time value of profit” method was unreliable; - he relied on purchase-order figures that did not match Bridgelux’s actual purchases; - his rebuttal opinions used the same allegedly inaccurate information; and - he improperly gave a legal opinion about whether the liquidated-damages clause was enforceable.

The court rejected the request for wholesale exclusion. It held that the time-value-of-money concept was an accepted financial principle and that Leavitt applied his method to facts in the record. The court recognized that there were serious questions about whether Bridgelux would eventually purchase all the LED holders contemplated by the agreement, but concluded that those questions could be addressed at trial.

The court also acknowledged substantial discrepancies between the purchases reflected in purchase order 1104-07 and Bridgelux’s alleged actual purchases. Those discrepancies could make Leavitt’s damages calculations less useful or persuasive. Still, the calculations were tied to an agreed purchase order rather than a wholly fictitious set of facts, so the court held that the dispute was for trial rather than a basis for exclusion.

The court likewise declined to exclude Leavitt’s rebuttal testimony. It noted that his report addressed alleged limitations in BJB’s damages calculations, including overhead costs and efficiency adjustments. Disputes about which product mix and purchase information were more accurate were factual disputes for the factfinder.

As to liquidated damages, the court distinguished between an expert’s legal conclusion and an opinion about whether a particular amount reasonably estimated actual damages. The court ruled that Leavitt could offer a principled opinion about whether eight cents per unit was a reasonable amount for BJB’s damages, but could not decide the legal question whether the clause was enforceable.

Bridgelux’s motion to exclude Pruenster

Bridgelux argued that Pruenster’s testimony should be excluded because he had not supplied a written expert report, his lost-profit calculations relied on speculative sales and pricing data, and his rebuttal report improperly addressed which purchase order controlled and which party breached the agreement.

The court held that Pruenster had sufficient personal knowledge to testify as a lay witness. His responsibilities included cost and resource management and overseeing logistics, warehousing, and assembly. He also had prior experience with production costs, BJB Germany’s finance department, and BJB’s finances. Because his lost-profit calculations were based on his personal experience and straightforward calculations, the court held that he was not subject to the expert-disclosure requirements or the expert-testimony screening rules.

The court alternatively ruled that, even if Pruenster were treated as an expert, he would be a “percipient expert”—a person giving expert opinions based on knowledge gained in the ordinary course of work—and therefore would not need to provide a written report under Rule 26(a)(2)(B). The court also found that objections to his pricing, overhead, and efficiency assumptions went to the weight of his testimony rather than its admissibility.

The court agreed that some statements in Pruenster’s rebuttal report, including the statement that Bridgelux breached the Letter Agreement, were impermissible legal opinions. But those limited statements did not justify excluding the entire report. Pruenster could rebut Leavitt’s damages methodology, although he could not offer legal opinions about breach or which purchase order controlled.

Disposition

The court denied BJB Electric’s motion to exclude Leavitt’s report and denied Bridgelux’s motion to exclude Pruenster’s testimony and rebuttal report. Both motions to exclude were denied.