1 John Kingston (pro hac vice) Michael Nepple (pro hac vice) Brian Hockett (pro hac vice) THOMPSON COBURN LLP One US Bank Plaza St. Louis, MO 63101 Telephone: (314) 552-6000 Facsimile: (314) 552-7000 Counsel for Defendants Charter Communications, Inc. and Charter Communications Operating, LLC IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ) In re: ) Chapter 11 ) WINDSTREAM HOLDINGS, INC., et al., ) Case No. 19-22312 (RDD) ) Plaintiffs. ) (Jointly Administered) ) ) WINDSTREAM HOLDINGS, INC., et al., ) ) Plaintiffs, ) Adv. Pro. No. 19-08246 ) vs. ) ) CHARTER COMMUNICATIONS, INC. and ) CHARTER COMMUNICATIONS OPERATING, ) LLC, ) ) Defendants. ) ) DEFENDANTS’ RESPONSE IN OPPOSITION TO PLAINTIFFS’ MOTION TO EXCLUDE EXPERT TESTIMONY OF ROBERT BORDERS 19-08246-rdd Doc 213 Filed 01/09/20 Entered 01/09/20 15:35:34 Main Document Pg 1 of 17
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John Kingston (pro hac vice) Michael Nepple (pro hac vice) Brian Hockett (pro hac vice) THOMPSON COBURN LLP One US Bank Plaza St. Louis, MO 63101 Telephone: (314) 552-6000 Facsimile: (314) 552-7000
Counsel for Defendants Charter Communications, Inc. and Charter Communications Operating, LLC
IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
) In re: ) Chapter 11
) WINDSTREAM HOLDINGS, INC., et al., ) Case No. 19-22312 (RDD)
) Plaintiffs. ) (Jointly Administered)
) )
WINDSTREAM HOLDINGS, INC., et al., ) )
Plaintiffs, ) Adv. Pro. No. 19-08246 )
vs. ) )
CHARTER COMMUNICATIONS, INC. and ) CHARTER COMMUNICATIONS OPERATING, ) LLC, )
) Defendants. )
)
DEFENDANTS’ RESPONSE IN OPPOSITION TO PLAINTIFFS’ MOTION TO EXCLUDE EXPERT TESTIMONY OF ROBERT BORDERS
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A. Mr. Borders has extensive experience in direct mail marketing. ..................... 2
B. Relying on his extensive experience, Mr. Borders has developed opinions that cast doubt on the opinions expressed in the Jarosz Report. ................................................................................................................. 4
1. Mr. Jarosz’s opinion depends on Dr. Van Diepen’s undisclosed expert opinion that the challenged advertisement affected customer decisions for . .............................................................................. 5
2. Mr. Jarosz’s opinion depends on the incorrect assumption that is an appropriate baseline month to begin the comparison. ............ 6
3. Mr. Jarosz’s calculation compares , which are historically the worst months for direct mail and regularly see significant subscriber fluctuations. ............................................................... 7
LEGAL STANDARD ...................................................................................................... 7
I. Mr. Borders’ extensive direct mail marketing experience qualifies him to offer opinions on the impact of the challenged advertisement. ...................................... 9
II. Mr. Borders’ opinions regarding the Jarosz Report are supported by both his experience and the evidentiary record. ................................................................... 9
Scott v. Chipotle Mexican Grill, Inc., 315 F.R.D. 33 (S.D.N.Y. 2016) ................................................................................. 8
United States v. Asare, 2019 WL 5693477 (S.D.N.Y. 2019) .......................................................................... 8
United States v. Litvak, 808 F.3d 160 (2d Cir. 2015) .................................................................................... 11
Other Authorities
Fed. R. Civ. P. 26(a)(2) ................................................................................................... 1
Fed. R. Evid. 702 ........................................................................................................ 8, 9
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Mr. Robert Borders is one of several experts engaged by Charter to rebut either
the opinions expressed by Mr. John Jarosz in his October 11, 2019 expert report
(Jarosz Report) or the alleged opinions of other undisclosed expert witnesses on which
Mr. Jarosz purported to rely in the Jarosz Report.
The only direct mail marketing expert in this case, Mr. Borders’ 40 years of
experience provides ample experience and specialized knowledge on which he relied
in forming the opinions expressed in his October 25, 2019 rebuttal report. In his
report, Mr. Borders describes the basis for three basic rebuttal opinions, all of which
would be helpful to the jury in understanding the Jarosz Report and determining
possible damages in in this case: (1) contrary to the alleged opinion of undisclosed
expert Dr. Merel Van Diepen and her colleagues1 (Jarosz Report at n.110), the
effective time period of a consumer direct mail piece in the telecommunications
industry is six to eight weeks— not ; (2) given the activity surrounding
the challenged advertisement and Plaintiffs’ own notice of bankruptcy, February
2019 would provide a more reliable baseline month than the baseline
employed in the Jarosz Report; and (3) given the historical volatility in subscriber
1 In opining on alleged lost profits, Mr. Jarosz relies on the opinion that a consumer direct mail piece in the telecommunications industry affects consumer behavior for one year and ascribes that opinion to Dr. Van Diepen and two of her colleagues (Jarosz Report at n.110). Because neither Dr. Van Diepen nor her colleagues were disclosed as expert witnesses pursuant to Federal Rule of Civil Procedure 26(a)(2), Defendants have had no opportunity to (a) determine whether Mr. Jarosz’s depiction of her opinion is correct, or (b) explore the basis for that alleged opinion. See Malletier v. Dooney & Bourke, Inc., 525 F.Supp.2d 558, 665-66 (S.D.N.Y. 2007) (expert’s reliance on underlying expert opinion of another expert improper where opposing party had no chance to depose underlying expert).
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churn during the summer, in the Jarosz Report is
unreliable. Adv. Dkt. No. 187, Exhibit B.
Plaintiffs’ motion to exclude Mr. Borders from testifying at trial ignores his
October 25, 2019 rebuttal report, the evidentiary record, and his deposition
testimony. Plaintiffs’ motion utterly fails to meet the standard for exclusion of Mr.
Borders’ opinions and should be denied.
BACKGROUND
The advertisement at issue is a direct mail advertisement sent to potential
consumers of internet and TV services in 22 states in mid-March of 2019. Mr.
Borders’ experience in the direct marketing industry could assist the jury in
understanding evidence related to that direct mail marketing campaign, particularly
Mr. Jarosz’s proposed opinion testimony related to that campaign.
A. Mr. Borders has extensive experience in direct mail marketing.
Mr. Borders has more than 40 years of experience in the direct marketing and
direct mail industry. He is intimately familiar with generally accepted direct
marketing practices, direct marketing tactics and strategy, the interaction between
a direct mail marketing and customer service response, and performance analysis for
direct marketing pieces. Adv. Dkt. No. 132, Ex. 48 at 4. He has more than 14 years’
worth of subscription entertainment industry experience in television (WHT,
DirecTV, Dish TV) and radio (SiriusXM Radio). Id. He has been involved in the
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development and management of more than 200 direct marketing and catalog
campaigns and multiple direct mail catalog operations. Id.
Mr. Borders has been a Vice President of Marketing for Wometco Home
Theater, a Vice President/Management Supervisor at the direct marketing division
of Young & Rubicam (then the world's largest advertising agency), and an officer for
divisions of the Gillette Company, Young & Rubicam, and Wometco Industries. Id.
at 4-5. His consulting experience includes the development, review, and management
of direct marketing campaigns and operations for AT&T, DirecTV, Sirius Satellite
Radio, DISH TV, United States Satellite Broadcasting, Commonwealth Edison,
Thomas Publishing (The Thomas’s Register), Ricoh Office Products, Automatic Data
Processing, Olympia Business Machines, The Economics Press, Accenture
Consulting, GTE, USSB, Motorola, Doyle Publishing, General Electric Information
Services, Hughes Environmental Engineering, KPR Healthcare Advertising and the
American Marketing Association. Id. at 5.
Mr. Borders has been a member of the Direct Marketing Association (DMA) for
14 years. Id. He is a charter member of the DMA’s TeleServices Council, serving on
the Council’s Operating Committee for six years and as its Chairman for two years.
Id. He has also been a member of the DMA’s Business Marketing Council and the
Board of Advisers of the Business-to-Business Database Marketing Conference. Id.
at 5-6. Mr. Borders has served as an expert witness for the United States Department
of Justice, United States District Court for the Southern District of Illinois and the
Florida, Colorado, and Wisconsin Attorneys General. Id. at 6.
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B. Relying on his extensive experience, Mr. Borders has developed opinions that cast doubt on the opinions expressed in the Jarosz Report.
Applying specialized knowledge developed during his 40 years of direct
marketing experience, Mr. Borders formed opinions regarding the following opinions
set forth in the Jarosz Report:
See Adv. Dkt. No. 117, Ex. 1 at ¶¶ 54-56.
2 Mr. Jarosz has testified that he only performed a lost profit analysis for Windstream Holdings. SeeAdv. Dkt. No. 132, Ex. 40 at 95:13-15 (“I think the only one for whom I did an analysis was Windstream Holdings, Inc., as I recall.”). It is unclear from the Jarosz Report whether the undisclosed Charter Exchange Opinion on which Mr. Jarosz relied purported to identify where Windstream Holdings and Charter compete or where Charter and all 205 plaintiffs (including, e.g., plaintiff Boston Retail Partners, LLC) compete. The sworn declaration of Windstream Holdings’ Chief Executive Officer establishes that the company actually had no subscribers. Case No. 19-22312-rdd, Dkt. No. 27 at ¶¶ 1, 2, 18-22.
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1. Mr. Jarosz’s opinion depends on Dr. Van Diepen’s undisclosed expert opinion that the challenged advertisement affected customer decisions for .
In purporting to analyze the impact of the challenged advertisement, Mr.
Jarosz compared See id. at ¶ 56,
n.110. Mr. Jarosz claimed no experience and articulated no independent opinion or
analysis regarding the duration of the effect of direct mail campaigns. See Adv. Dkt.
No. 117, Ex. 1 at Tab. 1. Instead, in identifying the proper time frame for his
comparison, he relied on his characterization of an expert opinion described in an
article analyzing charitable direct mailings from three charities in the Netherlands
(the Van Diepen Opinion). See id. at ¶ 56, n.110 (describing Mr. Jarosz’s reliance on
Van Diepen, Merel, Bas Donkers, and Philip Hans Franses, “Dynamic and
Competitive Effects of Direct Mailings: A Charitable Giving Application,” Journal of
Marketing Research, Vol. 46, No. 1 (2009)). Mr. Jarosz does not explain how the Van
Diepen Opinion on charitable giving in the Netherlands nearly twenty years ago
applies to the issues in this action, which involve neither the Netherlands nor
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charitable giving.3 Id. And the Jarosz Report is contrary to, e.g., Dr. Van Diepen’s
recognition that—even with charitable mailings in the Netherlands—“a mailing is
half forgotten after a month.” See Exhibit 1 at p. 127. Contrary to the undisclosed
and untestable Van Diepen opinion, Mr. Borders has opined, based on his experience
involving commercial direct mail in the United States, that a direct mail piece such
as the challenged advertisement would not have an effect for five months and that a
six to eight week time frame is proper. Adv. Dkt. No. 187, Exhibit B at 3.
Replacing the period drawn from the Van Diepen Opinion with the
six to eight week period drawn from Mr. Borders’ own expertise (which is wholly
supported by the evidence), Windstream Holdings’ alleged lost profits calculation
evaporates. Applying Mr. Jarosz’s own methodology, but measuring from March
through May results in a 0.00% change to the “churn rate.” See Adv. Dkt. No. 117,
Ex. 1 at Tab 5.
2. Mr. Jarosz’s opinion depends on the incorrect assumption that is an appropriate baseline month to begin the comparison.
Another foundational assumption of Mr. Jarosz’s lost profits opinion is that
Adv. Dkt. No. 117, Ex. 1 at ¶ 56. Mr. Borders finds
this premise unsound based on his experience. Adv. Dkt. No. 187, Exhibit B at 6.
And the record evidence supports Mr. Borders’ conclusion. Charter received more
phone calls in response to the challenged advertisement in March than any other
3 In his deposition, Mr. Borders testified that non-profit solicitations (in his experience) may not follow the six-eight week trend. Borders Deposition, Exhibit 2, at 27:17-22. This observation not only reconciles his experience with the article, but suggests that the article is entirely irrelevant.
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month. Id.
Id. Mr. Jarosz’s
calculation ignores both Defendants’ evidence and Plaintiffs’ claims. Based on his
experience, and consistent with the record evidence, Mr. Borders opined that
February presents the more accurate baseline. See id. at 7.
3. Mr. Jarosz’s calculation compares , which are historically the worst months for direct mail and regularly see significant subscriber fluctuations.
Adv. Dkt. No. 117, Ex. 1 at ¶ 54. Based on his
extensive experience, Mr. Borders has opined this is an unsound comparison because
“in the subscription entertainment business … the summer months have more churn
and flux than any other period.” Adv. Dkt. No. 187, Exhibit B at 7; Exhibit 2, at
54:24-55:2. As Mr. Borders explained in his deposition, “people move, college
students graduate, come back, have to change their e-mail addresses and the like,
houses get sold, people move into new houses.” Exhibit 2 at 55:9-12. This testimony,
from someone with extensive experience in subscription entertainment, supports the
proposition that there is likely to be significant volatility in a subscriber base during
summer months that cannot be attributed to the challenged advertisement. This
opinion further undermines Mr. Jarosz’s opinion because he made no effort to control
for this variable.
LEGAL STANDARD
In determining whether an expert’s opinion is admissible, a court considers
three factors: (1) the qualifications of the proposed expert; (2) whether each proposed
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opinion is based on reliable data and reliable methodology; and (3) whether the
proposed testimony would be helpful to the trier of fact. See Fed. R. Evid. 702. See
also Daubert v. Merrell Dow Pharm, Inc., 509 U.S. 579, 589 (1993)). Courts in “the
Second Circuit liberally construe the expert qualifications requirement, and
generally will not exclude expert testimony provided the expert has educational and
experiential qualifications in a general field closely related to the subject matter in
question.” See United States v. Asare, 2019 WL 5693477, at *2 (S.D.N.Y. 2019).
Courts have routinely recognized that rebuttal reports—offering to explain, repel,
counteract or disprove the evidence and opinions of the opposing party’s affirmative
expert report—assist the jury in understanding the evidence and deciding disputed
issues. See e.g., Scott v. Chipotle Mexican Grill, Inc., 315 F.R.D. 33, 47 (S.D.N.Y. 2016)
(finding that the rebuttal opinion would be helpful to the jury).
ARGUMENT
Plaintiffs fall far short of establishing any basis for this Court to exclude Mr.
Borders’ rebuttal expert report. Mr. Borders is the only expert witness with expertise
in the direct mail industry, and his extensive experience particularly applies to
subscription-based entertainment services. He is sufficiently qualified to provide
specific critiques of the Van Diepen Opinion described and relied upon in the Jarosz
Report. As a rebuttal expert, Mr. Borders does not need to form an opinion of his own
regarding, e.g., lost profits—he only needs to attack the opinions of the Plaintiffs’
expert. Sci. Components Corp. v. Sirenza Microdevices, Inc., 2008 WL 4911440, at
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testimony that “identifies a flawed premise in an expert report that casts doubt on
both that report’s conclusions and its author’s expertise”).
I. Mr. Borders’ extensive direct mail marketing experience qualifies him to offer opinions on the impact of the challenged advertisement.
Mr. Borders is the only expert disclosed by any of the 207 parties to this lawsuit
with expertise in direct mail marketing campaigns. He has 40 years of experience in
the direct marketing/mail industry, including more than 14 years of experience in
subscription entertainment (some of those for Windstream and Charter’s competitors
(DirecTV and Dish TV)). See Adv. Dkt. No. 137, Exhibit 48 at 4. He has been involved
in the development and management of more than 200 direct marketing and catalog
campaigns, and multiple direct mail catalog operations, consulting on direct
marketing projects for AT&T, DirecTV, Sirius Satellite Radio, DISH TV, and United
States Satellite Broadcasting, Inc. Id. His wide breadth of experience in direct
marketing will assist the jury in evaluating Mr. Jarsoz’s proposed opinion testimony
and deciding the disputed issue of damages. See Fed. R. Evid. 702.
II. Mr. Borders’ opinions regarding the Jarosz Report are supported by both his experience and the evidentiary record.
Mr. Borders opined that the reasonable lifetime of a direct mail piece is six to
eight weeks—not the drawn from the Van Diepen Opinion. Adv. Dkt.
No. 187, Exhibit B at 3. Plaintiffs contend Mr. Borders’ opinion contradicting the
Van Diepen Opinion should be stricken because it is based solely on his say so. Not
so. Mr. Borders’ opinion is backed by his extensive experience and the evidence.
Based on his experience, Mr. Borders opined that the baseline for the life of a
direct mail piece is six to eight weeks. See id. at 3. This baseline was not an
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unsupported guess. Years ago, AT&T asked Mr. Borders to determine the life of a
direct mail piece. See Exhibit 2 at 20:9-21:21. Specifically, he was tasked with
determining the response period for a direct mail piece to ensure sufficient customer
service staffing. See id. at 20:9-22:20. In the first phase of the project, he analyzed
the responses and formed his conclusion that six to eight weeks is the lifetime of a
direct mail piece. See id. at 22:1-24:22. He validated this conclusion in subsequent
phases. Id. While that is the only time he studied this issue, he has found this
baseline consistent over the thirty years of experience since. See id. at 26:12-22; 30:3-
23.
Further, Mr. Borders’ testimony is supported by the record. Over half of all
responses received by Charter in response to the challenged advertisement were
received in March, mere days after the advertisement was sent. Adv. Dkt. No. 187,
Exhibit B at 4. This rate rapidly diminished, with well over 90% of the responses
received by Charter within eight weeks—a time period consistent with Mr. Borders’
AT&T study and industry experience. Id.
Id. Finally,
Charter’s actions are inconsistent with a sophisticated business entity that expects a
five-month life span on a mailing: the challenged advertisement’s offer expired
roughly four weeks after it was sent and Charter sends out direct mail pieces
soliciting customers in the Windstream footprint every two weeks—both facts that
are inconsistent with a five-month life span. See id. at 5.
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Mr. Borders also criticized Mr. Jarosz’s selection of as the appropriate
baseline month for his analysis of Windstream Holdings’ purported lost profits
analysis. Adv. Dkt. No. 187, Exhibit B at 6.
Adv. Dkt. No. 117, Ex. 1 at ¶ 56. In contrast, Mr. Borders opined that
is not a reliable month for comparison because (1) Charter received most of its
responses to the Charter Advertisement in March (days after it came out); (2)
Windstream likewise received the majority of customer calls referencing Charter in
March; and (3) Windstream Holdings’ own notice of bankruptcy, beginning in
February and continuing through the end of March, may have an impact on customer
churn. Adv. Dkt. No. 187, Exhibit B at 6-7. This evidence supports Mr. Borders’
opinion that Mr. Jarosz’s use of a March baseline is flawed.
In the subscription media industry, subscriber data is inherently volatile as a
result of a number of factors, including people moving, the real estate market, the
economy, and the job market. Nevertheless, Windstream attacks Mr. Border’s opinion
that, because of the known volatility, the summer months are a poor basis for Mr.
Jarosz’s calculation. See id. at 7-8. As discussed above, Mr. Borders bases his
testimony on his experience in the direct mail industry and subscription
entertainment. Id. Experts are of course allowed to rely on their own experience
when appropriate—not every opinion needs to have been peer reviewed. See United
States v. Litvak, 808 F.3d 160, 180 n. 25 (2d Cir. 2015) (“[D]istrict courts must be
mindful that the Daubert factors do not all necessarily apply even in every instance…,
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and in many cases, the reliability inquiry may instead focus upon personal knowledge
and experience of the expert.”) (internal citation and quotation marks omitted). The
fluid changes regularly occurring during the summer months have nothing to do with
the challenged advertisement, but instead, are a recognized pattern of organic
seasonal subscriber movement. Unlike Mr. Jarosz, Charter’s expert, Dr. Jules
Kamin, specifically identified and corrected for the seasonality of subscriber data.
Given this known volatility, the remedial comparison Mr. Jarosz conducted—looking
back only one year, failing to correct for seasonality, and selecting a baseline month
inconsistent with the record evidence—is inadequate and Mr. Border’s testimony
identifying and discussing the deficiencies in Mr. Jarosz’s proposed opinion testimony
will assist the jury in understanding that evidence.
CONCLUSION
For the foregoing reasons, the Court should deny Plaintiffs’ request to exclude
Mr. Robert Borders from offering expert testimony relating to his October 25, 2019
report at trial.
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Dated: January 9, 2020 Respectfully submitted,
THOMPSON COBURN LLP
By: /s/ John Kingston John Kingston (pro hac vice) Michael Nepple (pro hac vice) Brian Hockett (pro hac vice) THOMPSON COBURN LLP One U.S. Bank Plaza, Suite 2700 St. Louis, MO 63101 314-552-6000 314-552-7000 (fax) [email protected][email protected][email protected]
Attorneys for Defendants Charter Communications, Inc. and Charter Communications Operating, LLC
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CERTIFICATE OF SERVICE
I hereby certify that on this 9th day of January, 2020, I served a true and correct copy of Defendants Charter Communications, Inc. and Charter Communications Operating, LLC’s Response in Opposition to Plaintiff’s Motion to Exclude Expert Testimony of Robert Borders via operation of the Court’s Electronic Filing System upon all counsel of record in the adversary proceeding.
Undersigned counsel further certifies that on this 9th day of January, 2020, a true and correct copy of Defendants Charter Communications, Inc. and Charter Communications Operating, LLC’s Response in Opposition to Plaintiff’s Motion to Exclude Expert Testimony of Robert Borders will be sent via email to the following:
Terence P. Ross Kristin Lockhart Michael R. Justus 2900 K Street NW North Tower – Suite 200 Washington, DC 20007-5118
Shaya Rochester Katten Muchin Rosenman LLP 575 Madison Avenue New York, NY 10022-2585
United States Trustee ATTN: Paul K. Schwartzburg and Serene Nakano U.S. Department of Justice Office of the United States Trustee 201 Varick Street, Rm. 1006 New York, NY 10014
Steve Rappoport Morrison & Foerster LLP 250 West 55th Street New York, NY 10019-9601
/s/ John Kingston
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