*1 Before the Court is Marquette Transportation Company, LLC's motion in limine in which it seeks to exclude: economic loss opinion testimony by an Impala Terminals Burnside, LLC employee, documentary evidence regarding its attempt to recover estimated economic loss incurred by its affiliated company under Robins Dry Dock, and certain trial exhibits. The Court granted expedited hearing on the motion insofar as it seeks to exclude proffered evidence regarding economic loss. For the reasons that follow, the motion is DENIED in part (on the issue of exclusion of economic loss damages evidence) and DEFERRED in part to trial (on the issue of excluding other items of evidence).

This in personam and in rem admiralty litigation arises out of an early morning allision in the Mississippi River. This Order and Reasons assumes familiarity with prior proceedings. See Order and Reasons dtd. 3/26/21.

Before dawn on March 14, 2019, Marquette Transportation Company, LLC's downbound towing vessel C. MICHAEL REEVES, with her 14 barges in tow, struck Impala Terminals Burnside LLC's sacrificial dolphin and the northern end of its Continuous Barge Unloader (CBU) dock at Mile Marker 169.5 AHP on the left descending bank of the lower Mississippi River. It was so dark that the captain could not see, and did not know, that the vessel hit a sacrificial dolphin and the CBU dock. No one at Impala did either until the sun came up.

On September 13, 2019, Impala Terminals Burnside, LLC sued Marquette Transportation Company, LLC, in personam, and the M/V C. MICHAEL REEVES, in rem, alleging that the M/V C. MICHAEL REEVES's allision with the Impala Terminal caused “significant damage to Impala's CBU dock, including physical damage to a tripod dolphin, the sheave platform, several aluminum catwalks, and various related structures[;]” and, as a result of the allision caused exclusively by Marquette's negligence, “the CBU dock cannot operate as designed and will be closed for repairs for a significant period of time” such that Impala seeks to recover repair costs, replacement costs, survey costs, and additional tug and barge costs. The Court granted Impala's request seeking a warrant in rem to arrest the vessel; later, the Court granted Impala's motion to file a multi-million dollar security bond to act as the substitute res and stay the execution of in rem process. Marquette filed its answer, stating in defense, among other things, that Impala had inadequate lighting on its dock on the morning of the allision. Thereafter, Impala amended its complaint joining as party-plaintiff its subrogated insurer, XL Insurance Company SE.[1]

*2 Pre-trial dispositive motion practice confirms that Marquette essentially concedes that pilot error in steering rather than flanking around Point Houmas and Bringier Point in the Mississippi River before reaching Impala Terminals constitutes the lion's share of fault contributing to the allision. But Marquette advances a comparative fault defense to Impala's claim that Marquette's sole fault caused the allision: Impala failed to install navigational lights on its dock and the lights it did have installed at the time of the allision were not illuminated.

Invoking evidentiary presumptions, both sides requested partial summary judgment, which was denied on March 24, 2021. The Court determined that the fulsome record: rendered superfluous the evidentiary and causation presumptions invoked by the parties; and disclosed genuine issues of material fact concerning comparative negligence and causation. See Order and Reasons dtd. 3/24/21, p. 19. While it was clear from the record that Captain Bailey's piloting errors were Marquette's fault and that those errors caused or contributed to the allision, issues of fact concerning Marquette's comparative negligence defense (and in particular whether the absence of navigational ... or any ... lights on the CBU dock contributed to the allision) rendered summary judgment unwarranted even for Impala. Thus, issues of fault, causation, and damages remain for trial.

One component of Impala's damages claim -- economic loss -- is hotly disputed. Impala (or its insurer, XL) seeks to recover $379,475 in economic losses it attributes to the CBU dock damage. Marquette complains that dispositive motion practice on this issue was precluded given the last-minute nature of Impala's documentary production on its economic loss claim.

According to Impala, before the March 14, 2019 allision, Impala's CBU dock accommodated two barges at a time. After the allision, the CBU dock could only accommodate one at a time until the damage was repaired in December 2019. At trial, Impala will offer its Manager of Accounting and Finance, Lindsay Naquin, who is expected to testify (consistent with her deposition testimony) how this inefficiency increased the time it took to deliver loaded barges to the dock and remove empty ones, and generally reduced Impala's overall efficiency discharging barges using the CBU dock. And the extra cost involved in shifting barges to and from the CBU dock was through the charter of an extra fleet boat by Impala Fleeting, Impala's sister company.

Impala contends that it paid Impala Fleeting $133,300 to cover the cost of the extra fleet boat for one month (August 2019); this clear one-month fleet boat rental cost was incurred because of the reduced capacity of the CBU dock and evidenced by an invoice. The remaining $246,175 in economic damages are not supported by invoices, says Impala, but are still recoverable and will be supported at trial. Impala will offer Naquin to explain that Impala sustained a significant economic loss due to the increased time it took to swap barges into and out of the CBU dock; following the allision, Impala contends, the turnaround time for swapping barges into and out of the CBU dock increased from a few minutes to more than an hour on average.

Impala explains that it did not calculate its terminal's economic loss with precision because this would have been time-consuming and would have delayed its recovery from its insurer, XL. Impala and XL agreed to settle the increased cost of work coverage charge by XL paying Impala for one extra shift for each of the barges unloaded by the CBU dock during the repair period, then estimated to be 882.5 barges, at an average cost of $430 per extra shift. Impala's economic damages claim is the only item of plaintiffs’ damages in dispute. Marquette now moves to exclude from the upcoming bench trial this economic loss evidence and testimony regarding Impala's affiliated company's alleged economic losses.[2]

*3 Mindful of the reliability, accuracy, and truth-seeking objectives of the Federal Rules of Evidence, and equally mindful that this case will be tried to the Court and not a jury, the Court considers whether Impala Terminals Manager of Finance and Accounting Lindsay Naquin's economic loss damages testimony is properly characterized as lay opinion testimony (as urged by Impala) or expert testimony (as urged by Marquette) as well as whether Impala timely produced two exhibits in support of its economic loss damages evidence.

Federal Rule Evidence 602 articulates the unremarkable general rule limiting a fact witness's testimony to those matters within his or her personal knowledge.[3] Relatedly, Rule 701 contemplates admission of lay opinions rationally based on personal knowledge; it limits lay opinion testimony to opinions that are “(a) rationally based on the witness's perception; (b) helpful to clearly understanding the witness's testimony or to determining a fact in issue; and (c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702.” Putting (a) differently: lay opinion testimony must be based on the fact-witness's “first-hand knowledge or observations.” See DIJO, Inc. v. Hilton Hotels Corp., 351 F.3d 679, 685 (5th Cir. 2003).[4] If the testimony amounts to “little more than choosing up sides, exclusion for lack of helpfulness is called for by” subsection (b). See Rule 701 Advisory Committee Notes. As for (c), such matters are reserved for expert testimony subject to Rule 702[5] and the attendant requirements and deadlines imposed by the Federal Rules of Civil Procedure.

*4 Governing expert disclosures, Rule 26 of the Federal Rules of Civil Procedure imposes different requirements upon proponents of expert testimony depending on whether the expert is retained specifically for litigation, or not. For those experts retained for litigation, Rule 26(a)(2)(A), (B) obliges a party to disclose to other parties the identity of any witness it may use to present evidence under Rules 702, 703, or 705; the disclosure must be accompanied by a written report “if the witness is one retained or specially employed to provide expert testimony in the case or one whose duties as the party's employee regularly involve giving expert testimony.” By contrast, for those expert witnesses not retained for litigation, Rule 26(a)(2)(C) dispenses with a written report requirement in favor of a more limited disclosure in which the proponent must disclose the subject matter on which the witness will present evidence and a summary of the proffered witness's facts and opinions. Subsection (C) governs “the disclosure of expert witnesses who were involved in the events leading up to litigation and may testify as both an expert and as a fact witness.” See LaShip, L.L.C. v. Hayward Baker, Incorporated, 680 Fed.Appx. 317 (5th Cir. 2017)(unpublished, per curiam) (district court did not abuse its discretion in finding that the opinion of one party's witness “was prepared specifically for litigation and did not equate to the ground-level opinion of an expert who was involved in the events leading up to litigation.”). There is no disclosure requirement for witnesses whose testimony is limited to facts and lay opinions.

Impala did not disclose Naquin as a testifying expert under Rule 26(a)(2).[6] Thus, if Naquin's testimony is considered expert testimony it must be excluded under Rule 37(c)(1) unless the nondisclosure was substantially justified or harmless. Classifying the substance of Naquin's testimony is hindered by a cold, pretrial record; indeed, it borders on advisory. Nevertheless, suffice to say that the Federal Rules of Civil Procedure and the Federal Rules of Evidence reinforce the conclusion that Naquin may testify regarding facts within her personal knowledge as Impala's accounting and finance manager and she may testify in this capacity to explain the documents she generated to support Impala's insurance claim, which XL paid. Given that evidentiary support for Impala's economic loss damages claim occurred later in the litigation -- through no clear fault of either party -- Marquette will be given an opportunity for additional discovery, to retain a damages expert, and to file a substantive dispositive motion, if it so chooses to traverse Naquin's lay opinions and Impala's economic loss damages presentation.[7]

Lindsay Naquin is Impala Terminals’ Manager of Finance and Accounting. In the normal course of her duties, she prepared the proof of loss or supporting materials for the insurance claim following the allision; her calculation of Impala's economic losses was submitted to XL, which upon review paid the claim. Marquette does not object that her explanation of the economic loss claim is irrelevant, nor does it object that it is not based on her personal knowledge; rather, Marquette contends that the substance of Naquin's testimony is expert testimony and, as such, Impala should not be permitted to bypass Daubert’s requirements or the deadlines for expert disclosures in the Federal Rules of Civil Procedure. Impala counters that Naquin's calculation of the economic loss claim, including Impala's reduced efficiency and the extra cost involved in shifting barges due to the charter of an extra fleet boat by its sister company, and her conclusion regarding Impala's economic losses is fact testimony, not opinion; and, to the extent Naquin's testimony involves any opinions, Impala submits, such lay opinions are admissible under Rule 701 based on her position as its manager of accounting and finance. Through the pretrial vantage of the parties’ paper submissions, the Court agrees.

*5 Although Naquin is employed by Impala, there is no dispute that she was not retained for litigation. In fact, it seems that the parties agree that her economic loss damages estimates/explanations were technically prepared in support of Impala's proof of loss to recover insurance proceeds. So, at most, the less stringent expert disclosure regime of Rule 26(a)(2)(C) could apply.[8] There is some conflicting case literature in the context of party-employee damages witnesses, suggesting that Naquin could be classified as a non-retained expert; however, scrutinizing Naquin's proffered testimony in the context of Impala's straightforward economic loss damages theory ultimately reinforces the conclusion that Naquin is more reasonably classified as a fact witness who may offer lay opinions, rather than as an expert subject to disclosure requirements. And, thus, her testimony should not be excluded for failure to comply with expert disclosure deadlines.

Notably, courts routinely permit company officers to testify as lay witnesses concerning damages issues like lost profits so long as the testimony is within the witness's personal knowledge and competency. See Tex. A&M Research Found. V. Magna Transp., Inc., 338 F.3d 394, 403 (5th Cir. 2003) (footnotes, citations omitted) (vice president's testimony relating to lost ship time was based on particularized knowledge; “rule 701 does not preclude testimony by business owners or officers on matters that relate to their business affairs. Indeed, an officer or employee of a corporation may testify to industry practices and pricing without qualifying as an expert”); see also Miss. Chem. Corp. v. Dresser-Rand Co., 287 F.3d 359, 373-74 (5th Cir. 2002)(lost profits testimony by purchaser's director of risk management and property taxation was admissible as opinion testimony of a lay witness considering that the witness had “direct knowledge of the business accounts underlying the profit calculation.”);[9] see also Servicios Comerciales Lamosa, S.A. de C.V. v. De la Rosa, 328 F. Supp. 3d 598 (N.D. Tex. 2018)(holding that lost profits testimony of tile distributor's owner was admissible as lay opinion testimony in distributor's action for breach of contract to act as an exclusive distributor against manufacturers of ceramic tile products; distributor's owner had personal knowledge of both the data and method used to calculate lost profits, and his general responsibilities afforded him sufficient knowledge of distributor's financials to testify regarding lost profits; tile manufacturers’ critiques of distributor's owner's calculations of his company's lost profits concerned the weight, not the admissibility of owner's lay opinion testimony; and manufacturers would have opportunity to offer rebuttal testimony and to deconstruct owner's numbers and expose assumptions on which he relied during cross examination). To be sure, “[t]he modern trend favors the admissibility of [lay] opinion testimony, provided that it is well founded on personal knowledge and susceptible to specific cross-examination.” Miss. Chem. Corp., 287 F.3d at 374 (quoting Teen-Ed, Inc. v. Kimball Int'l, Inc., 620 F.2d 399, 403 (3d Cir. 1980)).[10] This is so, as the advisory committee's note to the 2000 amendments to Rule 701 clarify, considering that the amendment was not intended to disturb the “prototypical examples of the type of evidence contemplated by the adoption of Rule 701,” such as where “the owner or officer of a business ... testif[ies] to the value or projected profits of the business, without the necessity of qualifying the witness as an accountant, appraiser, or similar expert.” Here, insofar as Naquin's lay opinion testimony as to damages is based on her particularized knowledge given her position in the business, rather than because of her specialized or technical knowledge solely within the realm of an expert, it is admissible as fact and lay opinion testimony.[11]

*6 To support its contention that Naquin should be classified as a non-retained expert, Marquette invokes LifeWise Master Funding v. Telebank, 374 F.3d 917 (10th Cir. 2004), where plaintiff produced a damages model that had been prepared by the company's Chief Executive Officer. The trial court found that the CEO's testimony was inadmissible as lay witness opinion, that the damages model was unreliable, unduly prejudicial, and that plaintiff's designated expert was not qualified under Rule 702 to testify regarding the damages model. The Tenth Circuit affirmed, holding that, although the proffered witness was the CEO, he did not have personal knowledge of the factors used to create the damages model and to estimate the company's lost profit. Id. at 930 (“Instead of limiting Mr. Livingston's testimony to his experience as a businessperson and president of the company ... [plaintiff] had him ‘enter the realm of rolling averages, S-curves, and compound growth rates that appear to be amalgam of logic, hope, and economic jargon.’ ”). The CEO admitted the he could not recall any prior instances where he used such methods. Because the subject matters on which the CEO testified were not rationally related to his perception, they were inadmissible as lay opinion testimony. Naquin's testimony concerning Impala's post-allision/pre-repair loss of efficiency is a far cry from the damages methodology for the “complex subject matter” at issue in LifeWise Master Funding.

Naquin's proffered testimony more closely resembles that of the director of risk management in Miss. Chem. Corp. or the accountant in Teen-Ed than the CEO in LifeWise Master Funding. Naquin is not a retained expert, nor is she functionally so; she is not a stranger to the facts of or damages from the allision, nor are any lay opinions drawn from facts wholly supplied by others in preparation for trial. So long as any opinion was formed based on her perceptions, it is admissible as a lay opinion.

Impala underscores that the economic loss issue is not of a technical nature; rather, it is predicated on the factual reality of its business and dock space. As Impala puts it, Lindsay Naquin will explain how the CBU dock, which pre-allision accommodated two barges at a time, could only accommodate one barge at a time until the damage was repaired in December 2019. Naquin will explain how this increased the time involved in delivering loaded barges to the dock and removing empty ones, reducing Impala's efficiency; the extra cost in shifting barges was incurred through chartering an extra fleet boat by Impala's sister company, for which Impala paid Impala Fleeting $133,300. As for the $246,175 in economic damages that are not supported by invoices, Impala submits that Naquin's (and others’) testimony will support this quantum by explaining the facts regarding Impala's loss of efficiency due to the increased time it took to swap barges in and out of the damaged CBU dock for which it was not economically feasible to retain an extra fleet boat from the abatement of high river conditions in early August 2019 through December 2019 when CBU dock repairs were completed. Naquin will explain how calculating this loss of efficiency with precision would have been time-consuming and would have delayed its recovery from its insurer, XL. Accordingly, Naquin will testify regarding the method utilized to calculate this loss of efficiency -- one extra shift for each barge unloaded by the CBU during the repair period -- which XL agreed was a reasonable estimate of Impala's increased cost of work claim.

Insofar as Naquin will offer opinions, it appears such opinions could be reached by an ordinary person performing straightforward, common sense calculations or estimates concerning Impala's historical efficiency (pre-allision) and efficiency post-allision based on reduced capacity of the CBU dock. And, as Marquette indicates in its papers, it seems any such opinions are vulnerable to effective cross-examination.[12]

At the upcoming bench trial, the Court may consider Naquin's first-hand, fact-based testimony along with any lay opinions rationally related to her competency in her capacity as Impala's manager of finance and accounting, along with her credibility; and give all its due weight.[13] Insofar as Marquette submits that it had insufficient time to rebut Naquin's lay opinions and two of the exhibits produced in support of Impala's economic loss claim, in the interest of fairness, and considering that counsel have been diligent and professional in pursuing discovery and discharging their obligations, Marquette will have the opportunity it requests “to rebut [Impala's evidence] through hiring an accountant to address Ms. Naquin's calculations and point out how unreliable and wholly speculative they are” and to “file[ ] a summary judgment motion under Robins Dry Dock to dismiss Impala Terminals’ attempt to recover for alleged losses of its affiliated company Impala Fleeting.”

*7 Accordingly, IT IS ORDERED: that Marquette's motion in limine is DENIED in part (insofar as it seeks to exclude Naquin's testimony and Impala's economic loss damages exhibits) and DEFERRED in part (insofar as it seeks to exclude other exhibits to be offered at trial). IT IS FURTHER ORDERED: that the May 10, 2021 bench trial is hereby continued, to be reset by the Court. Finally, IT IS FURTHER ORDERED: that discovery (including any expert discovery) is hereby reopened in limited fashion concerning Impala's economic loss damages claim; within 60 days, the parties shall complete discovery focused on this claim, and any dispositive motion invoking Robins Dry Dock relative to Impala's economic loss damages claim shall be filed no later than June 30, 2021.

New Orleans, Louisiana, April 22nd, 2021