1012-00005 · Stonefield Logistics Group · Experts

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP LITIGATION (GENERAL) PRACTICE GROUP

INTERNAL RESEARCH MEMORANDUM

FROM: Simone Laroche, Associate, Litigation (General), Calderwood & Harkness LLP

TO: Patrick Gallagher, Lead Associate, Litigation (General); Samuel Eklund, Responsible Partner, Litigation (General)

DATE: September 5, 2023

RE: Daubert Challenge to Expert Report of Dr. Philip Trask (Trask Greystone & Associates) — Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.)

MATTER NO.: 1012-00005

CLIENT: Stonefield Logistics Group Inc.

This memorandum is protected by the attorney-client privilege and the work product doctrine. It is prepared in anticipation of litigation and for the purpose of providing legal advice. It is not intended for disclosure to any third party and should not be distributed outside of the litigation team without prior authorization from the Responsible Partner.

I. Executive Summary

The purpose of this memorandum is to analyze the viability of a motion under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), to exclude, in whole or in part, the expert report and anticipated trial testimony of Dr. Philip Trask of Trask Greystone & Associates, served on behalf of plaintiff Vantor Holdings Corp. ("Vantor" or "plaintiff") on May 15, 2023. This memorandum evaluates the specific methodological and analytical deficiencies in Dr. Trask's report, assesses the likelihood of success of a Daubert challenge on each category of damages, and recommends a strategic course of action for presenting these arguments to the Court.

Dr. Trask's expert report opines that Vantor's total damages arising from Stonefield Logistics Group Inc.'s ("Stonefield" or "SLG") allegedly wrongful termination of the Transportation Services Agreement dated March 15, 2019 (the "TSA," Contract Ref. No. SLG-VTS-2019-0315) amount to $95,400,000. This total is broken down across six categories of claimed damages:

• Liquidated damages (two full remaining contract years): $64,800,000

• Liquidated damages (partial year — 27 days): $2,430,000

• Lost profits: $18,700,000

• Stranded assets: $5,200,000

• Workforce reduction costs: $2,870,000

• Mitigation costs: $1,400,000

After a thorough review of Dr. Trask's report, the applicable legal standards, and the strategic posture of this case, my bottom-line recommendation is as follows: There are viable grounds to challenge Dr. Trask's lost profits opinion and certain components of his consequential damages analysis under *Daubert*, but the strongest tactical approach is to incorporate these arguments into our summary judgment briefing rather than filing a standalone *Daubert* motion. This recommended approach serves multiple objectives. First, it avoids the significant risk of educating the plaintiff — or any successor counsel that may eventually appear on Vantor's behalf — as to the precise nature and contours of our attack on the damages case, thereby preventing opportunities to cure or supplement the expert report before dispositive motions. Second, it allows the Court to address the admissibility of Dr. Trask's opinions in the broader legal context of our merits arguments, particularly the unenforceability of the liquidated damages clause as an impermissible penalty, the mutual consequential damages waiver contained in TSA Section 15.1, and Vantor's failure to mitigate its alleged losses. Third, this approach conserves client resources at a time when the case is, for all practical purposes, dormant and may soon be subject to dismissal for failure to prosecute.

This memorandum should be read in conjunction with the May 22, 2023 Analysis of the Trask Greystone Expert Report prepared by Patrick Gallagher and this author, which provides a detailed line-by-line assessment of Dr. Trask's report, as well as the final rebuttal expert report of Dr. Evelyn Rosser of Kensington Analytics Group LLC, served on August 25, 2023, which presents the affirmative counter-opinion on damages that supports our defense.

II. Background: Dr. Trask's Expert Report

A. Expert Qualifications

Dr. Philip Trask is the founder and lead expert of Trask Greystone & Associates, located at 400 Madison Avenue, Suite 900, New York, New York 10017. The firm provides economic consulting and expert witness services with a focus on commercial litigation, and has been retained in numerous matters in state and federal courts throughout the Northeast.

Dr. Trask's report identifies him as an economist with expertise in commercial damages quantification, contract valuation, and transportation industry economics. His curriculum vitae, attached as Exhibit A to his expert report, indicates that he holds a Ph.D. in Economics from Columbia University (1996) and an M.B.A. from the Wharton School of the University of Pennsylvania (1991). He has been qualified as an expert in damages and valuation in approximately thirty-five federal and state court proceedings, including at least eight matters in the Southern District of New York. His publication record includes articles in the Journal of Forensic Economics and the American Economic Review, as well as several contributed chapters in treatises on commercial damages methodology. He has served as an adjunct professor at the NYU Stern School of Business, where he taught a course on litigation economics.

It is my assessment that Dr. Trask's qualifications are facially adequate and would likely survive a pure credentials-based challenge. His academic background, publication record, and history of qualification as an expert in commercial damages matters, particularly in the transportation sector, would make it difficult for us to argue convincingly that he lacks the requisite specialized knowledge under Federal Rule of Evidence 702(a). Any attempt to disqualify Dr. Trask on the basis of his credentials alone would risk expending judicial goodwill on an argument unlikely to succeed, and would divert the Court's attention from the far more meritorious challenges to his methodology and the reliability of his opinions. Accordingly, our Daubert challenge should focus squarely on methodology and reliability, not qualifications.

B. Summary of Trask Opinions

Dr. Trask's expert report is organized into six discrete damages categories, which collectively yield the $95.4 million total damages figure. The following is a summary of each opinion.

1. Liquidated Damages Opinion ($67,230,000 Total)

Dr. Trask calculates liquidated damages based on the early termination formula set forth in Section 14.2 of the TSA. Under that provision, in the event of a termination that is not "for Cause" as defined in Section 13.1(a), Stonefield is obligated to pay Vantor a termination fee equal to 75% of the Annual Contract Value ("ACV") for each full remaining contract year, plus a pro rata portion for any partial year remaining. The ACV under the TSA is $43,200,000.

Dr. Trask applies this formula to the remaining term of the TSA as follows:

• Two full remaining contract years: 75% × $43,200,000 × 2 = $64,800,000

• Partial year (27 days): 75% × $43,200,000 × (27/365) ≈ $2,430,000

• Liquidated damages subtotal: $67,230,000

Dr. Trask opines that these amounts are owed under Section 14.2 because, in his opinion, Stonefield's termination of the TSA effective March 4, 2022 was not "for Cause" within the meaning of Section 13.1(a). As discussed in greater detail in Section IV.B below, this opinion embeds a legal and factual conclusion — whether the termination was or was not for Cause — that arguably exceeds the proper scope of expert testimony. However, the arithmetic itself is straightforward and not in dispute.

2. Lost Profits Opinion ($18,700,000)

Dr. Trask opines that Vantor, through its transportation subsidiary Vantor Transportation Services, LLC ("VTS"), would have earned an average 12% operating margin on the remaining committed volume under the TSA, which he estimates at approximately $86.4 million (two years multiplied by the $43.2 million ACV). This yields approximately $18,700,000 in lost profits that Dr. Trask claims Vantor would have earned over and above the liquidated damages amount, representing the incremental economic value of the contract relationship that is not captured by the Section 14.2 formula.

This is the opinion that presents the most significant methodological vulnerabilities and is the primary target of our Daubert analysis. As discussed at length in Section IV.A, Dr. Trask's 12% operating margin assumption is substantially higher than VTS's actual historical margins on the SLG account, and his failure to address VTS's own performance failures, mitigation obligations, and the duplicative nature of this claim alongside the liquidated damages claim renders this opinion unreliable.

3. Consequential Damages Opinions ($9,470,000 Combined)

Dr. Trask identifies three categories of consequential damages:

(a) Stranded Assets ($5,200,000). Dr. Trask opines that Vantor incurred $5,200,000 in damages attributable to the depreciation on tractors and trailers acquired specifically for the SLG contract, plus lease termination costs on certain equipment. His calculation employs a replacement cost depreciation methodology to determine the remaining economic value of the assets at the time of contract termination, and adds lease early-termination penalties for twelve trailer leases.

(b) Workforce Reduction Costs ($2,870,000). Dr. Trask opines that Vantor incurred $2,870,000 in costs related to the reduction in force of approximately 180 drivers and support staff that he attributes to the TSA termination. This figure includes severance payments, accrued vacation payouts, COBRA continuation subsidies, and estimated unemployment insurance cost increases.

(c) Mitigation Costs ($1,400,000). Dr. Trask opines that Vantor incurred $1,400,000 in costs associated with efforts to obtain replacement freight following the TSA termination, including brokerage fees, sales and marketing costs, and onboarding expenses for new accounts.

C. Key Documents Relied Upon by Trask

Dr. Trask's report identifies the following principal documents and data sources upon which he relied in forming his opinions:

• The TSA and all Schedules thereto, including Schedule B (rate structure and annual adjustments), Schedule C (exclusivity provisions and dedicated fleet commitments), and all amendments through the date of termination;

• Vantor's internal financial statements for fiscal years 2019 through 2022, including consolidated income statements, balance sheets, and segment-level reporting for VTS;

• VTS fleet records and depreciation schedules maintained by Vantor's asset management department;

• Vantor human resources records relating to the workforce reductions implemented in March and April 2022;

• The demand letter from Harrison Caldwell of Caldwell Royce & Shapiro LLP, plaintiff's former counsel, dated April 8, 2022, which set forth Vantor's initial damages claim; and

• Various publicly available transportation industry data, including freight market indices and carrier operating benchmarks.

Critically, Dr. Trask's report contains no reference to several categories of documents and data that are directly relevant to the reliability of his damages analysis:

• He does not reference or analyze Vantor's own performance data for Q4 2021, specifically the Service Level Objective ("SLO") metrics generated by SLG's Carrier Performance Portal, which demonstrate that VTS failed all five contractual performance benchmarks during the period immediately preceding termination;

• He does not reference or analyze VTS's Q4 2021 performance failures in any respect, treating the remaining contract term as if VTS would have performed at full contractual levels;

• He makes no reference to the Milescu November 12, 2021 email (Bates No. VHC-008417), an internal VTS communication from Dragos Milescu (VTS Regional Operations Manager) to Andrea Chen (VTS VP of Fleet Operations), in which Milescu confirms the reassignment of 85 tractors from SLG dedicated lanes to Northwind Distribution Co.'s account in October 2021, which directly precipitated the SLO failures that constituted the basis for Stonefield's termination for Cause.

These omissions are not merely gaps in documentation; they reflect fundamental methodological deficiencies in Dr. Trask's damages model, as his "but-for" analysis assumes a version of reality that is contradicted by VTS's own records and the testimony of its own employees. These omissions form the core of our Daubert arguments, as set forth in Section IV below.

III. Applicable Legal Standard

A. Daubert Framework (Fed. R. Evid. 702)

Under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and its progeny, the district court serves as a "gatekeeper" with the responsibility to ensure that expert testimony admitted at trial is both reliable and relevant. The gatekeeping function requires the court to make a preliminary assessment of whether the expert's reasoning or methodology underlying the testimony is scientifically valid and can properly be applied to the facts at issue. Id. at 592–93; see also Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147–49 (1999) (extending the Daubert gatekeeping obligation to all expert testimony, not only scientific testimony).

Federal Rule of Evidence 702, as amended effective December 1, 2023, codifies the Daubert framework and provides that a witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if the proponent demonstrates that it is more likely than not that:

(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(d) the expert's opinion reflects a reliable application of the principles and methods to the facts of the case.

The Second Circuit has elaborated on the Daubert gatekeeping framework in Amorgianos v. National Railroad Passenger Corp., 303 F.3d 256 (2d Cir. 2002), and subsequent decisions. Under the Second Circuit's approach, the trial court must assess, among other factors: (1) whether the theory or technique the expert employs can be and has been tested; (2) whether it has been subjected to peer review and publication; (3) the known or potential rate of error; and (4) whether the theory or technique has gained general acceptance in the relevant scientific or professional community. See Daubert, 509 U.S. at 593–94; Amorgianos, 303 F.3d at 265–66. These factors are flexible and non-exclusive; the inquiry is context-specific and does not require the court to mechanically apply each factor in every case. Kumho Tire, 526 U.S. at 150.

A critical principle of the Daubert analysis is that the court should focus on the expert's methodology, not the conclusions the expert reaches. See Daubert, 509 U.S. at 595 ("The focus, of course, must be solely on principles and methodology, not on the conclusions that they generate."). However, the Supreme Court has also made clear that "nothing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence that is connected to existing data only by the ipse dixit of the expert." General Electric Co. v. Joiner, 522 U.S. 136, 146 (1997). Where the analytical gap between the data and the expert's opinion is too wide, the court may properly exclude the testimony as unreliable. Id.; see also Amorgianos, 303 F.3d at 267 ("The district court must . . . ensure that the expert's opinion is based on a reliable methodology rather than mere subjective belief or unsupported speculation.").

The proponent of the expert testimony bears the burden of establishing admissibility by a preponderance of the evidence. See Daubert, 509 U.S. at 592 n.10; Nimely v. City of New York, 414 F.3d 381, 396 (2d Cir. 2005).

B. Daubert Applied to Damages Experts

The Daubert gatekeeping function applies with full force to damages experts in commercial breach of contract cases. Courts in the Southern District of New York routinely scrutinize the methodologies employed by damages experts and have not hesitated to exclude damages opinions that fail to meet the reliability requirements of Rule 702 and Daubert. See, e.g., Boucher v. U.S. Suzuki Motor Corp., 73 F.3d 18, 21 (2d Cir. 1996) (affirming exclusion of damages expert whose methodology lacked analytical rigor); Lippe v. Bairnco Corp., 99 F. Supp. 2d 313, 332 (S.D.N.Y. 2000) (excluding damages opinion based on speculative assumptions unsupported by reliable data).

Several principles specific to the evaluation of damages experts are relevant to our analysis:

First, the expert must employ a methodology that reliably calculates damages flowing from the alleged breach, and not from exogenous market factors, the plaintiff's own conduct, or speculative assumptions untethered to reliable data. Where the expert fails to isolate the damages attributable to the defendant's allegedly wrongful conduct from damages attributable to other causes, the opinion is unreliable and subject to exclusion. See Raskin v. Wyatt Co., 125 F.3d 55, 67–68 (2d Cir. 1997); In re Fosamax Prods. Liab. Litig., 645 F. Supp. 2d 164, 192 (S.D.N.Y. 2009).

Second, under New York law — which governs this dispute pursuant to the choice-of-law provision in TSA Section 20.5 — lost profits must be proven with "reasonable certainty." See Kenford Co. v. County of Erie, 67 N.Y.2d 257, 261 (1986); Ashland Mgmt. Inc. v. Janien, 82 N.Y.2d 395, 403 (1993). This is a substantive standard under New York law that intersects with the Daubert reliability inquiry: an expert opinion on lost profits that rests on speculative assumptions or fails to establish damages with reasonable certainty may be excluded both because it fails to satisfy the Daubert reliability requirement and because it is legally insufficient to support a claim for lost profits under the governing law. See Schonfeld v. Hilliard, 218 F.3d 164, 172 (2d Cir. 2000) (noting that "the reasonable certainty standard requires the finder of fact to determine that it is 'reasonably certain' that the plaintiff would have obtained the projected profits in the absence of the alleged wrongful conduct").

Third, courts have the authority to exclude an expert's opinion in whole or in part. Partial exclusion — for example, excluding the lost profits opinion while permitting the liquidated damages testimony — is a well-established remedy under Daubert and Rule 702. See Daubert, 509 U.S. at 595–96; In re Rezulin Prods. Liab. Litig., 309 F. Supp. 2d 531, 546 (S.D.N.Y. 2004). This granular approach is particularly relevant here, as certain of Dr. Trask's opinions (notably the liquidated damages calculation) are arithmetically sound, while others (notably the lost profits opinion) suffer from fundamental methodological deficiencies.

IV. Analysis of Challengeable Opinions

A. Lost Profits Opinion ($18,700,000) — Strongest Ground for Exclusion

The lost profits opinion is the strongest candidate for a Daubert challenge. Dr. Trask's calculation suffers from four independent, mutually reinforcing deficiencies, each of which, standing alone, could support exclusion. Taken together, they present a compelling case that this opinion is not the product of reliable principles and methods reliably applied to the facts, as required by Rule 702 and Daubert.

1. Inflated and Unreliable Operating Margin Assumption

The most significant methodological flaw in Dr. Trask's lost profits opinion is his assumption that VTS would have earned a 12% operating margin on SLG freight for the remaining term of the TSA. This assumption is the linchpin of his $18.7 million lost profits figure, and it is unsupported by — and contradicted by — the actual historical financial data produced in this litigation.

Vantor's own financial statements, produced in discovery, show that Vantor generated FY 2021 revenue of approximately $385 million and FY 2022 revenue of approximately $310 million, reflecting a significant contraction attributable in part to broader market conditions in the trucking and logistics industry. More directly relevant, VTS's operating margins on the SLG account specifically, as reflected in internal VTS financial data produced in the supplemental document production on February 28, 2023, were as follows:

• Contract Year 1 (April 2019–March 2020): approximately 6.8% operating margin

• Contract Year 2 (April 2020–March 2021): approximately 7.2% operating margin

• Contract Year 3 (April 2021–January 2022, through date of termination): approximately 4.9% operating margin, reflecting the deterioration in VTS's performance and the increased costs associated with fleet mismanagement

Against this backdrop, Dr. Trask's assumption of a 12% operating margin is strikingly high — approximately 67% to 145% above the actual historical margins VTS achieved on this account during the three years it actually performed under the TSA. The report provides no adequate basis for this dramatic departure from the historical data. Upon close examination, the 12% figure appears to be derived from Vantor management's internal projections and five-year strategic plan, which projected margin improvements based on operational efficiencies that VTS had not yet achieved and, given its Q4 2021 performance trajectory, was unlikely ever to achieve. Dr. Trask does not adequately reconcile this aspirational figure with VTS's actual historical margins, nor does he explain why management projections that were never realized should be preferred over actual financial performance as the basis for a lost profits calculation.

Dr. Evelyn Rosser's rebuttal report, served on August 25, 2023 by our retained expert at Kensington Analytics Group LLC, identifies this as a critical methodological flaw. Dr. Rosser opines that using aspirational forward-looking projections rather than actual historical performance data as the basis for a lost profits calculation renders the opinion unreliable and inconsistent with generally accepted principles of forensic economics. Dr. Rosser further notes that the trend in VTS's actual margins was declining over the three contract years — from 6.8% to 7.2% and then sharply down to 4.9% — which makes the assumption of a 12% margin for future years not merely unsupported but affirmatively contradicted by the available evidence.

Under New York law, lost profits must be established with "reasonable certainty" and cannot be based on speculation or conjecture. See Kenford Co., 67 N.Y.2d at 261. The gap between the assumed 12% margin and the actual 4.9%–7.2% historical margins is not a matter of reasonable disagreement among experts; it reflects a fundamental disconnect between Dr. Trask's model and the reliable data available. The opinion is "connected to existing data only by the ipse dixit of the expert," which is precisely the circumstance the Supreme Court identified in Joiner as warranting exclusion. 522 U.S. at 146.

2. Failure to Account for Vantor's Own Breaches and Performance Failures

Dr. Trask's lost profits model assumes, without qualification or adjustment, that VTS would have performed the TSA at full ACV levels for the entire remaining term. This assumption is squarely contradicted by the undisputed evidence of VTS's performance during the period immediately preceding termination.

The SLG Carrier Performance Portal data, produced in discovery and verified through the deposition testimony of Martin Hess (Stonefield Director of Carrier Management, deposed June 14, 2023), demonstrates that VTS failed all five contractual Service Level Objectives in Q4 2021:

These are not marginal shortfalls. VTS failed every single SLO, in most cases by a wide margin. Equipment availability, in particular, was more than 20 percentage points below the contractual standard, reflecting the direct impact of VTS's unilateral decision to reassign 85 tractors from SLG dedicated lanes to the Northwind Distribution Co. account in October 2021. This reassignment is documented in the Milescu email of November 12, 2021 (Bates No. VHC-008417), in which Dragos Milescu (VTS Regional Operations Manager) confirmed to Andrea Chen (VTS VP of Fleet Operations) that the 85 tractors had been reassigned "to support Northwind's Q4 surge requirements" and acknowledged that this would "impact SLG service levels until we can source replacement units." VTS fleet records produced in supplemental discovery confirm that the reassignment occurred without notice to Stonefield and that replacement units were never sourced.

Dr. Trask's report does not reference any of this evidence. He does not address VTS's Q4 2021 SLO failures, the Milescu email, the tractor reassignment, or the possibility that — even in a "but-for" world in which Stonefield had not terminated the TSA — VTS's performance failures would have given Stonefield grounds for termination for Cause, or at minimum would have resulted in reduced volume commitments, rate adjustments, or contractual penalties that would have diminished the value of the contract to Vantor.

A reliable damages model in a breach of contract case must account for the plaintiff's own conduct that would have affected the value of the contract, even in the hypothetical "but-for" scenario. See Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 F.3d 89, 110 (2d Cir. 2007) (damages must be calculated net of factors that would have reduced the plaintiff's recovery even absent the breach). Dr. Trask's wholesale failure to incorporate VTS's documented performance failures and fleet diversion into his damages model renders his lost profits opinion methodologically unsound and unreliable under Daubert.

3. Failure to Conduct Meaningful Mitigation Analysis

Dr. Trask's report contains no analysis of Vantor's duty to mitigate its losses following the TSA termination, nor does it assess whether Vantor made reasonable efforts to replace the SLG volume after Stonefield terminated the agreement effective March 4, 2022. The report simply calculates lost profits on the remaining contract term as if no mitigation were possible or required.

Under New York law, a plaintiff has an affirmative duty to mitigate damages, and a defendant is entitled to a reduction in damages corresponding to the amount that the plaintiff could have avoided through reasonable efforts. See LNC Invs., Inc. v. First Fidelity Bank, N.A., 173 F.3d 454, 466 (2d Cir. 1999); Restatement (Second) of Contracts § 350 (1981). This duty is not merely a legal defense; it has direct implications for the reliability of an expert's damages calculation. A damages expert who fails to incorporate mitigation into a lost profits model produces an opinion that overstates the plaintiff's actual economic harm and is therefore unreliable.

The freight market conditions in Q1 and Q2 of 2022, the period immediately following the TSA termination, were robust by any measure. Industry data, including the Brightmoor Software and the Dunmore Systems, indicate that spot market rates were elevated approximately 35% above historical averages during this period, driven by sustained post-pandemic demand and persistent capacity constraints. This was, in short, an extraordinarily favorable market for carriers seeking to replace lost volume. Vantor, with approximately 650 tractors and 2,100 trailers available across its fleet, had substantial capacity to pursue replacement freight.

Despite these favorable conditions, there is no evidence that Vantor took meaningful steps to mitigate its losses. Derek Pruitt, Vantor's Vice President of Business Development, admitted during his July 10, 2023 deposition that he could not identify specific mitigation steps taken by Vantor after the TSA termination. When asked what Vantor did to replace the SLG volume, Pruitt testified: "We explored some options, but I couldn't point to specific contracts or accounts that we brought on as a result of losing SLG." (Pruitt Dep. Tr. at 187:12–16.) This testimony, combined with the absence of any documentary evidence of mitigation efforts in Vantor's production, strongly suggests that Vantor failed to mitigate — a fact that should be reflected in any reliable damages model.

A damages expert's failure to incorporate mitigation into a lost profits calculation is a recognized basis for exclusion under Daubert. An expert must present a net damages figure that reflects the plaintiff's obligation to minimize its losses; failure to do so renders the opinion unreliable because it does not measure the actual economic harm caused by the alleged breach. See Shatkin v. Meridian Group, 727 F.2d 202, 208 (2d Cir. 1984); Northpoint Group Labs., Inc. v. 10X Genomics, Inc., No. 19-cv-15896, 2023 WL 2612456, at *7 (S.D.N.Y. Mar. 23, 2023) (excluding damages opinion in part due to failure to account for plaintiff's mitigation obligations).

4. Duplicative of Liquidated Damages

Dr. Trask's report claims both liquidated damages of $67,230,000 and lost profits of $18,700,000, which together constitute $85,930,000 in alleged damages. Both categories purport to compensate Vantor for the same fundamental harm — the loss of the remaining economic value of the TSA.

Under New York law, a plaintiff cannot recover both liquidated damages, which are contractually agreed upon as a substitute for actual damages in the event of breach, and actual lost profits arising from the same breach. The entire purpose of a liquidated damages clause is to establish ex ante the measure of compensation for breach, precisely to avoid the need to prove actual damages. See Kestrel Corporation, 4 N.Y.3d 373, 380 (2005); Northpoint Holdings v. Purdy Corp., 41 N.Y.2d 354, 358 (1977) ("[T]he effect of an enforceable liquidated damages clause is to fix the amount of damages in advance, making it unnecessary to determine the actual amount of harm suffered."). Allowing a plaintiff to recover both the stipulated liquidated amount and its actual lost profits would provide double recovery for the same economic injury.

The inclusion of both liquidated damages and lost profits in a single damages figure is, at a minimum, a legal error that infects the reliability of Dr. Trask's overall damages model. It suggests either that Dr. Trask did not adequately consider the legal framework governing the relationship between liquidated damages and actual damages, or that he deliberately constructed a model designed to maximize the total damages figure without regard to the legal constraints on recovery. Either explanation undermines the reliability of his opinion.

This argument is developed in greater detail in Patrick Gallagher's February 15, 2023 Memorandum re Duplicative Damages — Liquidated Damages vs. Lost Profits, which we should incorporate by reference in any brief that raises this issue. The duplicative damages argument is both a Daubert reliability argument (the expert's methodology produces a result that is legally impossible) and a substantive legal argument (the plaintiff cannot recover both categories as a matter of law), which further supports our recommendation to present this argument in the context of summary judgment.

B. Liquidated Damages Opinion ($67,230,000) — Weaker Daubert Ground; Better Addressed as Legal Issue

Dr. Trask's liquidated damages calculation is a straightforward application of the Section 14.2 formula: 75% multiplied by the $43.2 million ACV multiplied by the remaining contract term. The arithmetic is not in dispute. Dr. Trask correctly identifies the relevant contractual provision, applies the stated formula, and arrives at a figure that is mathematically accurate. There is no meaningful Daubert challenge to the mechanics of this calculation.

The challenge to the liquidated damages lies not in Dr. Trask's methodology but in the enforceability of the clause itself as a matter of law — specifically, whether the Section 14.2 liquidated damages clause constitutes an unenforceable penalty under New York law. This is a pure legal question that is properly addressed on summary judgment, not through a Daubert motion directed at the expert's methodology.

To be sure, Dr. Trask does assume, without conducting any independent analysis, that the termination was not "for Cause" under Section 13.1(a). This is a legal and factual conclusion that arguably exceeds the proper scope of expert testimony, as it requires the expert to interpret the TSA's termination provisions and apply them to the facts of the case — a task reserved for the Court and the jury. However, courts in this district frequently permit damages experts to testify on the basis of assumed liability scenarios — i.e., "If the termination was not for Cause, then the liquidated damages amount to X" — and a challenge on this ground alone is unlikely to succeed, particularly given the prevalence of this practice in commercial litigation. See, e.g., In re Aluminum Warehousing Antitrust Litig., 336 F.R.D. 5, 47 (S.D.N.Y. 2020) (noting that experts may testify on damages under assumed scenarios).

Recommendation: The liquidated damages enforceability challenge should be addressed through our summary judgment motion, as outlined in the September 15, 2023 Summary Judgment Roadmap Memorandum, and not through a standalone Daubert motion. Our September 19, 2022 Memorandum re Enforceability of Liquidated Damages Clause Under New York Law concluded that there is a "moderate" probability of obtaining an unenforceability finding, noting New York courts' general reluctance to override freely negotiated liquidated damages provisions in commercial agreements between sophisticated parties, but also identifying the potentially disproportionate relationship between the 75%-of-ACV formula and the actual damages that Stonefield's termination would be expected to cause. This argument is best developed in the summary judgment context, where it can be presented alongside the for-Cause termination defense and the consequential damages waiver.

C. Consequential Damages Opinions ($9,470,000 Combined) — Viable but Best Combined with Section 15.1 Argument

Dr. Trask's three consequential damages categories — stranded assets ($5,200,000), workforce reduction costs ($2,870,000), and mitigation costs ($1,400,000) — total $9,470,000. While each of these opinions contains some methodological vulnerabilities, the most effective challenge to these categories is not Daubert but the mutual consequential damages waiver in TSA Section 15.1.

Section 15.1 of the TSA provides, in relevant part:

"IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY BREACH THEREOF, INCLUDING BUT NOT LIMITED TO LOST PROFITS (OTHER THAN PROFITS DIRECTLY LOST ON COMMITTED VOLUMES UNDER THIS AGREEMENT), LOSS OF BUSINESS, COSTS OF PROCUREMENT OF SUBSTITUTE SERVICES, OR SIMILAR DAMAGES, REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE AND REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES."

If the Court enforces Section 15.1, the stranded assets, workforce reduction costs, and mitigation costs are barred as a matter of contract law, regardless of whether Dr. Trask's methodology for calculating them is reliable under Daubert. This is a threshold legal argument that renders the methodological challenge secondary. Our April 5, 2023 Memorandum re Damages Cap Under TSA Section 15.1 analyzes the enforceability of this provision and concludes that it is likely enforceable under New York law as a freely negotiated limitation of liability between sophisticated commercial parties. The Section 15.1 argument should be the lead attack on these categories in our summary judgment briefing.

Notwithstanding the primacy of the Section 15.1 argument, Dr. Trask's methodology for calculating the consequential damages categories does contain vulnerabilities that could support a Daubert challenge if the Court declines to enforce Section 15.1:

Stranded Assets ($5,200,000). Dr. Trask uses a replacement cost depreciation methodology rather than actual book value depreciation from VTS's own accounting records. Replacement cost depreciation yields a higher residual value at the time of termination (and therefore a higher claimed loss) than book value depreciation. Moreover, Dr. Trask does not account for the residual value or redeployment potential of the tractors and trailers that he characterizes as "stranded." These were not SLG-specific assets in any meaningful sense; they were standard over-the-road tractors and dry van trailers that could be (and in many cases were) deployed on other routes and customer accounts. The failure to consider redeployment overstates the actual economic loss attributable to the TSA termination.

Workforce Reduction Costs ($2,870,000). Dr. Trask includes severance and related costs for approximately 180 employees, all of which he attributes to the TSA termination. However, he does not analyze whether these employees were terminated as a direct result of the loss of the SLG account or as part of broader workforce reductions at Vantor during this period. Vantor's revenue dropped from approximately $385 million in FY 2021 to approximately $310 million in FY 2022, a decline of approximately $75 million, of which the SLG account represented approximately $43.2 million (or 58% of the total decline). The remaining $31.8 million in revenue decline was attributable to market factors entirely unrelated to the TSA termination. Without a reliable attribution analysis, it is impossible to determine what portion of the workforce reduction costs is causally linked to the TSA termination as opposed to broader market-driven contraction. Dr. Trask's failure to conduct this analysis renders his workforce reduction opinion unreliable.

Mitigation Costs ($1,400,000). The calculation of mitigation costs is relatively straightforward and less vulnerable to a methodological challenge. The primary basis for exclusion of this category is the Section 15.1 waiver, not Daubert.

Recommendation: These methodological issues could support a Daubert challenge, but they are more efficiently and effectively addressed in summary judgment briefing alongside the Section 15.1 argument. Leading with the contractual waiver — a threshold legal defense — is tactically superior to leading with a methodological critique, as it requires no expert testimony to support and shifts the burden to Vantor to demonstrate that Section 15.1 is unenforceable.

V. Strategic Considerations: Standalone Daubert Motion vs. Combined Summary Judgment

The threshold strategic question for the team is not whether we can bring a Daubert challenge — we clearly can, particularly as to the lost profits opinion — but whether we should file a standalone Daubert motion at this stage of the litigation, or instead preserve our arguments for incorporation into summary judgment briefing. After careful consideration of the relevant factors, I recommend the latter approach.

A. Arguments for Filing a Standalone Daubert Motion

There are meaningful arguments in favor of filing a standalone Daubert motion, and I do not dismiss them lightly:

Narrowing the damages case before dispositive motions. If successful, exclusion of Dr. Trask's opinions — or even a partial exclusion of the lost profits and consequential damages opinions — before summary judgment would dramatically narrow Vantor's damages case. If the lost profits ($18,700,000) and consequential damages ($9,470,000) are excluded, Vantor's remaining claim would be limited to the liquidated damages of $67,230,000, which itself is subject to our enforceability challenge. This narrowing could simplify the summary judgment analysis and potentially position us for a dispositive ruling on damages.

Settlement leverage. Excluding a significant portion of Vantor's damages claim would provide substantial leverage in any future settlement discussions. As the case currently stands, Vantor's total claimed damages of $95.4 million dwarf Stonefield's settlement authority. Per Samuel Eklund's November 15, 2022 email to Alison Trang and Douglas Whitmore (Ridgeline Capital Partners' in-house team), Ridgeline agreed to settlement authority in the range of $0 to $4.5 million but expressed a preference for aggressive defense of the case. A ruling excluding a substantial portion of Vantor's damages claim could create the conditions for a resolution within or near Ridgeline's authorized range.

Demonstrating aggressive defense posture. Filing a standalone Daubert motion would be consistent with Ridgeline Capital Partners' stated preference for an aggressive defense strategy. As the majority equity holder in Stonefield, Ridgeline has been actively engaged in litigation strategy decisions, and a visible demonstration of offensive litigation conduct may satisfy Ridgeline's expectations regarding the vigor of the defense.

B. Arguments Against Filing a Standalone Daubert Motion (Preferred Approach)

Notwithstanding the potential benefits, I believe the arguments against a standalone Daubert motion are materially stronger at this juncture, for the following reasons:

Telegraphing our summary judgment strategy. A standalone Daubert motion would necessarily reveal the precise nature of our attack on Dr. Trask's methodology, including the specific deficiencies we have identified in the margin assumptions, the failure to account for VTS's performance failures, the absence of mitigation analysis, and the duplication with liquidated damages. This would effectively hand Vantor (or any successor counsel that may eventually appear) a detailed roadmap of our arguments, providing an opportunity to cure or supplement the expert report before summary judgment. Under Federal Rule of Civil Procedure 26(e), a party has a continuing obligation to supplement expert disclosures, and courts have discretion to permit supplemental or amended expert reports under appropriate circumstances. Although the discovery period has closed, a court could exercise its discretion to permit a limited supplementation if the party demonstrates good cause. Filing a standalone Daubert motion before summary judgment creates a risk that we provoke precisely this scenario. If Vantor retains new counsel — though, as discussed below, this appears increasingly unlikely — a standalone Daubert motion could trigger a request to serve a supplemental or amended expert report, potentially curing the deficiencies we have identified and neutralizing the very arguments we had hoped to deploy.

Procedural efficiency and judicial preference. Combining Daubert arguments with summary judgment briefing is common and accepted practice in the Southern District of New York. Many judges in this district — including Judge Miranda K. Calloway, to whom this case is assigned — prefer to address expert admissibility issues in the context of dispositive motions rather than in standalone proceedings. Judge Calloway's Individual Practices and Rules, updated as of January 2023, expressly provide that "Daubert issues may be raised in conjunction with motions for summary judgment and need not be the subject of a separate motion unless the Court orders otherwise." Filing a standalone motion in the face of this guidance risks appearing either unfamiliar with the Court's preferences or tactically motivated, neither of which serves our interests.

The case is effectively dormant. The single most significant factor weighing against a standalone Daubert motion is the current posture of the case. Since Caldwell Royce & Shapiro LLP's motion to withdraw as counsel for Vantor was granted on October 18, 2023 — following a fee dispute in which Vantor owed Caldwell Royce approximately $870,000 in unpaid invoices — Vantor has been without legal representation. The Court set an initial deadline of December 17, 2023 for Vantor to retain substitute counsel, which Vantor failed to meet. The Court then granted an extension to April 12, 2024, which Vantor also failed to meet. On February 12, 2024, Nikolai Vantorovich — Vantor's founder and principal — appeared pro se at a status conference, but the Court correctly noted that a corporation such as Vantor Holdings Corp. cannot appear pro se in federal court and must be represented by counsel. See Rowland v. California Men's Colony, 506 U.S. 194, 202 (1993); Jones v. Niagara Frontier Transp. Auth., 722 F.2d 20, 22 (2d Cir. 1983). There has been no docket activity since February 12, 2024.

In light of this posture, filing any substantive motion at this stage may be premature. The more immediate question is whether the case will be dismissed for failure to prosecute under Federal Rule of Civil Procedure 41(b). Our team has already prepared a Draft Motion to Dismiss for Failure to Prosecute, circulated on January 15, 2024, and the January 10, 2025 Memorandum — Options for Case Resolution analyzes the various procedural pathways for bringing this case to a close. Investing in a standalone Daubert motion when the case may be dismissed on procedural grounds in the near term is not an efficient use of client resources.

Resource conservation and cost-benefit analysis. A standalone Daubert motion would require substantial additional work, including the preparation of a full brief (likely 25–30 pages), a statement of material facts, supporting declarations and exhibits, potential reply briefing, and oral argument before Judge Calloway. Based on our experience with similar motions in this district, the estimated cost of preparing and arguing a standalone Daubert motion would be in the range of $150,000 to $225,000 in attorney fees and expert consulting fees (including time for Dr. Rosser to prepare a declaration in support). These costs would be in addition to the approximately $4.42 million already expended on this matter — consisting of $3.8 million in attorney fees and approximately $620,000 in costs and disbursements through October 2023. Given the strong probability of dismissal for failure to prosecute, the cost-benefit analysis weighs heavily against investing in a standalone Daubert motion at this time.

Strength of our rebuttal expert. Dr. Evelyn Rosser's rebuttal expert report, served on August 25, 2023 through Kensington Analytics Group LLC, provides a comprehensive counter-opinion that effectively neutralizes the most significant of Dr. Trask's opinions. Dr. Rosser opines that if the termination was valid for Cause under Section 13.1(a), Vantor is entitled to $0 in damages. In the alternative, even under a lost-profits theory assuming wrongful termination, Dr. Rosser opines that the maximum damages to which Vantor could be entitled are $8,200,000, after adjusting for VTS's own breaches and performance failures, Vantor's failure to mitigate, and proper market-based margin calculations using actual historical data rather than management projections. This rebuttal effectively reduces the claimed damages by more than 91% (from $95.4 million to $8.2 million) through competing expert testimony. At trial, this "battle of the experts" approach — presenting Dr. Rosser's well-grounded rebuttal against Dr. Trask's inflated figures — may be more persuasive to the trier of fact than the outright exclusion of Dr. Trask's testimony, which could be perceived by a jury as a procedural maneuver that prevented them from hearing the full picture.

VI. Specific Daubert Arguments to Preserve for Summary Judgment Briefing

Regardless of whether a standalone Daubert motion is ultimately filed, the following specific arguments should be preserved and incorporated into our summary judgment briefing, as applicable. These arguments are organized by damages category and priority.

A. Arguments for Exclusion of Lost Profits Opinion

The following five arguments should be presented to the Court in support of excluding, or at minimum disregarding, Dr. Trask's lost profits opinion of $18,700,000:

1. The 12% operating margin assumption is unsupported by VTS's actual historical margins on the SLG account, which ranged from 4.9% to 7.2% over the three contract years, and relies instead on speculative management projections that were never realized. The analytical gap between the assumed margin and the actual data is too wide to satisfy the reliability requirements of Rule 702 and Daubert. See General Electric Co. v. Joiner, 522 U.S. at 146.

2. Dr. Trask fails to account for VTS's own material breaches and performance failures — specifically, VTS's failure of all five SLOs in Q4 2021, including on-time pickup (78.2% vs. 95% standard), on-time delivery (81.6% vs. 93% standard), tender acceptance (71.4% vs. 90% standard), equipment availability (62% vs. 85% standard), and cargo claims ratio (1.07% vs. ≤0.5% standard) — which would have reduced the value of the contract even absent Stonefield's termination. A damages model that ignores the plaintiff's own conduct is methodologically unsound.

3. Dr. Trask fails to incorporate any mitigation analysis despite the existence of highly favorable freight market conditions in Q1–Q2 2022 (spot rates approximately 35% above historical averages) and Vantor's own admission through the deposition testimony of Derek Pruitt (July 10, 2023) that no specific mitigation steps were taken following the TSA termination. A lost profits opinion that fails to account for the plaintiff's duty to mitigate does not reliably measure the actual economic harm caused by the alleged breach.

4. The lost profits claim is duplicative of the liquidated damages claim under New York law. A plaintiff cannot recover both liquidated damages, which substitute for actual damages, and actual lost profits arising from the same breach. The inclusion of both categories in Dr. Trask's total damages figure represents either a methodological error or a legal error that infects the reliability of the overall damages model. See Kestrel Corporation, 4 N.Y.3d 373, 380 (2005).

5. Dr. Trask's "but-for" world assumes full performance by VTS for the remaining contract term, which is contradicted by the undisputed evidence that VTS diverted 85 tractors from SLG dedicated lanes to the Northwind Distribution Co. account in October 2021 without notice to Stonefield (per the Milescu November 12, 2021 email, VHC-008417, and supplemental fleet records) and experienced systemic performance deterioration across all five SLOs. A "but-for" analysis that ignores these facts does not reflect a reliable application of accepted principles and methods to the facts of this case.

B. Arguments for Partial Exclusion of Consequential Damages Opinions

The following arguments should be presented in connection with the consequential damages categories, in tandem with our primary Section 15.1 contractual waiver argument:

1. Dr. Trask's stranded assets calculation employs a replacement cost depreciation methodology that overstates the economic loss by ignoring VTS's own book value depreciation schedules and, more significantly, ignores the residual value and redeployment potential of the tractors and trailers, which were standard industry equipment capable of deployment on other routes and customer accounts.

2. Dr. Trask's workforce reduction costs are not reliably attributed to the TSA termination as opposed to broader market-driven contraction at Vantor. VTS's parent company experienced a $75 million revenue decline in FY 2022, of which only approximately $43.2 million (58%) was attributable to the loss of the SLG account. Without a causation analysis isolating the TSA-related portion of the workforce reductions from the market-driven portion, the opinion is unreliable.

3. All three consequential damages categories — stranded assets, workforce reduction costs, and mitigation costs — are subject to the mutual consequential damages waiver in TSA Section 15.1, which is a threshold legal argument that renders the methodological challenges secondary. The Section 15.1 argument should be presented first, with the Daubert arguments as an alternative ground.

C. Arguments We Should NOT Raise

Equally important to identifying the arguments we should make is identifying the arguments we should avoid, in order to preserve credibility with the Court and avoid wasting judicial resources:

1. We should not challenge Dr. Trask's qualifications. His credentials — a Ph.D. in economics from Columbia, extensive publication history, and approximately thirty-five prior qualifications as an expert in federal and state courts — are more than adequate to satisfy the threshold requirements of Rule 702(a). A credentials-based challenge would almost certainly fail and would waste judicial goodwill that is better spent on the more meritorious methodological challenges.

2. We should not challenge the arithmetic of the liquidated damages calculation. The formula (75% × ACV × remaining years) is explicitly set forth in TSA Section 14.2, and Dr. Trask has correctly applied it. The issue with the liquidated damages is the legal enforceability of the clause itself — whether it constitutes an unenforceable penalty under New York law — not the expert's mathematical competence. Challenging the calculation rather than the clause would mischaracterize the nature of our argument and could confuse the Court.

VII. Coordination with Summary Judgment Roadmap

The Daubert arguments identified in this memorandum should be coordinated with the broader summary judgment strategy outlined in the September 15, 2023 Summary Judgment Roadmap Memorandum. That memorandum organizes our dispositive motion arguments into four principal pillars:

Pillar 1: Valid termination for Cause based on undisputed SLO failures in Q4 2021 and VTS's failure to cure following the December 3, 2021 Notice of Default.

Pillar 2: Unenforceability of the Section 14.2 liquidated damages clause as an impermissible penalty under New York law.

Pillar 3: Bar on consequential damages under the mutual waiver in TSA Section 15.1.

Pillar 4: Vantor's failure to mitigate its damages following the TSA termination.

The Daubert arguments regarding Dr. Trask's lost profits opinion map directly to Pillars 1, 2, and 4 of the summary judgment roadmap. Specifically:

• The argument that Dr. Trask fails to account for VTS's own performance failures (Section VI.A, Argument Nos. 2 and 5 above) supports and reinforces Pillar 1 (valid termination for Cause), because the same evidence of VTS's SLO failures that establishes Stonefield's right to terminate for Cause also demonstrates that Dr. Trask's "but-for" world is built on a false premise.

• The argument that the lost profits claim is duplicative of liquidated damages (Section VI.A, Argument No. 4 above) supports and reinforces Pillar 2 (unenforceability of liquidated damages), because both arguments require the Court to examine the relationship between the Section 14.2 formula and Vantor's actual economic harm.

• The argument that Dr. Trask fails to incorporate mitigation analysis (Section VI.A, Argument No. 3 above) supports and reinforces Pillar 4 (failure to mitigate), because the same evidence of favorable market conditions and Vantor's inaction that supports the mitigation defense also demonstrates the unreliability of Dr. Trask's damages model.

The Daubert arguments regarding the consequential damages opinions map to Pillar 3 (Section 15.1 waiver). The contractual waiver is the threshold argument; the methodological deficiencies in Dr. Trask's stranded assets and workforce reduction opinions serve as alternative grounds for excluding those opinions if the Court declines to enforce Section 15.1.

Recommendation: Our summary judgment brief should include a dedicated section, which I would propose titling "Exclusion or Disregard of Dr. Trask's Unreliable Damages Opinions," that presents combined Daubert and merits arguments in an integrated fashion. This section should be supported by:

• Dr. Rosser's August 25, 2023 rebuttal expert report and a supporting declaration addressing the specific methodological deficiencies in Dr. Trask's opinions;

• The deposition testimony of Derek Pruitt (July 10, 2023), particularly his admissions regarding the absence of specific mitigation efforts following the TSA termination;

• The deposition testimony of Dragos Milescu (June 22, 2023), particularly his admissions regarding the October 2021 reassignment of 85 tractors to the Northwind Distribution Co. account;

• The deposition testimony of Martin Hess (June 14, 2023), who verified the Q4 2021 SLO metrics from Stonefield's Carrier Performance Portal; and

• The underlying documentary evidence, including the Milescu November 12, 2021 email (VHC-008417), VTS fleet records, the Carrier Performance Portal data, and VTS's historical financial records showing actual operating margins on the SLG account.

This integrated approach will allow the Court to assess the reliability of Dr. Trask's opinions in the context of the substantive legal questions that determine the scope of recoverable damages, producing a more efficient and more persuasive presentation than a standalone Daubert motion followed by a separate summary judgment brief.

VIII. Conclusion and Recommendation

Based on the analysis set forth in this memorandum, I conclude as follows:

1. There are viable *Daubert* grounds to seek exclusion of Dr. Trask's lost profits opinion ($18,700,000). The opinion relies on an inflated and unsupported 12% operating margin assumption, fails to account for VTS's own material breaches and systemic performance failures, omits any analysis of Vantor's duty and ability to mitigate, and is duplicative of the liquidated damages claim. These deficiencies, individually and collectively, render the lost profits opinion unreliable under Rule 702 and Daubert.

2. There are secondary *Daubert* grounds to challenge the consequential damages opinions ($9,470,000 combined), specifically the stranded assets calculation (improper depreciation methodology and failure to account for redeployment) and the workforce reduction costs (unreliable attribution to TSA termination versus market factors). However, these challenges are more efficiently and effectively addressed through the TSA Section 15.1 consequential damages waiver argument, which provides a threshold legal bar to all three consequential damages categories.

3. The liquidated damages calculation ($67,230,000) is not well-suited for a *Daubert* challenge. The arithmetic is correct, and the relevant issue — whether the Section 14.2 liquidated damages clause constitutes an unenforceable penalty — is a question of law, not a question of expert reliability. This issue should be addressed exclusively through summary judgment.

4. Primary recommendation: Do not file a standalone *Daubert* motion at this time. Instead, preserve all Daubert arguments for incorporation into summary judgment briefing if and when the case resumes. Given the current dormancy of the case — no docket activity since February 12, 2024, Vantor without counsel, and FRCP 41(b) dismissal probable — investing in standalone Daubert briefing is not cost-justified. The estimated $150,000–$225,000 cost of a standalone motion, layered on top of the $4.42 million already spent, cannot be justified when there is a strong probability that the case will be dismissed for failure to prosecute.

5. Contingency: If Vantor retains new counsel and the case is reactivated, we should immediately revisit the standalone Daubert question at that time. In that scenario, a standalone motion would be most effective if filed simultaneously with, or immediately before, our summary judgment motion, in order to prevent Vantor from curing the deficiencies i

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP LITIGATION (GENERAL) PRACTICE GROUP
INTERNAL RESEARCH MEMORANDUM
FROM: Simone Laroche, Associate, Litigation (General), Calderwood & Harkness LLP
TO: Patrick Gallagher, Lead Associate, Litigation (General); Samuel Eklund, Responsible Partner, Litigation (General)
DATE: September 5, 2023
RE: Daubert Challenge to Expert Report of Dr. Philip Trask (Trask Greystone & Associates) — Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.)
MATTER NO.: 1012-00005
CLIENT: Stonefield Logistics Group Inc.
This memorandum is protected by the attorney-client privilege and the work product doctrine. It is prepared in anticipation of litigation and for the purpose of providing legal advice. It is not intended for disclosure to any third party and should not be distributed outside of the litigation team without prior authorization from the Responsible Partner.
I. Executive Summary
The purpose of this memorandum is to analyze the viability of a motion under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), to exclude, in whole or in part, the expert report and anticipated trial testimony of Dr. Philip Trask of Trask Greystone & Associates, served on behalf of plaintiff Vantor Holdings Corp. ("Vantor" or "plaintiff") on May 15, 2023. This memorandum evaluates the specific methodological and analytical deficiencies in Dr. Trask's report, assesses the likelihood of success of a Daubert challenge on each category of damages, and recommends a strategic course of action for presenting these arguments to the Court.
Dr. Trask's expert report opines that Vantor's total damages arising from Stonefield Logistics Group Inc.'s ("Stonefield" or "SLG") allegedly wrongful termination of the Transportation Services Agreement dated March 15, 2019 (the "TSA," Contract Ref. No. SLG-VTS-2019-0315) amount to $95,400,000. This total is broken down across six categories of claimed damages:
• Liquidated damages (two full remaining contract years): $64,800,000
• Liquidated damages (partial year — 27 days): $2,430,000
• Lost profits: $18,700,000
• Stranded assets: $5,200,000
• Workforce reduction costs: $2,870,000
• Mitigation costs: $1,400,000
After a thorough review of Dr. Trask's report, the applicable legal standards, and the strategic posture of this case, my bottom-line recommendation is as follows: There are viable grounds to challenge Dr. Trask's lost profits opinion and certain components of his consequential damages analysis under *Daubert*, but the strongest tactical approach is to incorporate these arguments into our summary judgment briefing rather than filing a standalone *Daubert* motion. This recommended approach serves multiple objectives. First, it avoids the significant risk of educating the plaintiff — or any successor counsel that may eventually appear on Vantor's behalf — as to the precise nature and contours of our attack on the damages case, thereby preventing opportunities to cure or supplement the expert report before dispositive motions. Second, it allows the Court to address the admissibility of Dr. Trask's opinions in the broader legal context of our merits arguments, particularly the unenforceability of the liquidated damages clause as an impermissible penalty, the mutual consequential damages waiver contained in TSA Section 15.1, and Vantor's failure to mitigate its alleged losses. Third, this approach conserves client resources at a time when the case is, for all practical purposes, dormant and may soon be subject to dismissal for failure to prosecute.
This memorandum should be read in conjunction with the May 22, 2023 Analysis of the Trask Greystone Expert Report prepared by Patrick Gallagher and this author, which provides a detailed line-by-line assessment of Dr. Trask's report, as well as the final rebuttal expert report of Dr. Evelyn Rosser of Kensington Analytics Group LLC, served on August 25, 2023, which presents the affirmative counter-opinion on damages that supports our defense.
II. Background: Dr. Trask's Expert Report
A. Expert Qualifications
Dr. Philip Trask is the founder and lead expert of Trask Greystone & Associates, located at 400 Madison Avenue, Suite 900, New York, New York 10017. The firm provides economic consulting and expert witness services with a focus on commercial litigation, and has been retained in numerous matters in state and federal courts throughout the Northeast.
Dr. Trask's report identifies him as an economist with expertise in commercial damages quantification, contract valuation, and transportation industry economics. His curriculum vitae, attached as Exhibit A to his expert report, indicates that he holds a Ph.D. in Economics from Columbia University (1996) and an M.B.A. from the Wharton School of the University of Pennsylvania (1991). He has been qualified as an expert in damages and valuation in approximately thirty-five federal and state court proceedings, including at least eight matters in the Southern District of New York. His publication record includes articles in the Journal of Forensic Economics and the American Economic Review, as well as several contributed chapters in treatises on commercial damages methodology. He has served as an adjunct professor at the NYU Stern School of Business, where he taught a course on litigation economics.
It is my assessment that Dr. Trask's qualifications are facially adequate and would likely survive a pure credentials-based challenge. His academic background, publication record, and history of qualification as an expert in commercial damages matters, particularly in the transportation sector, would make it difficult for us to argue convincingly that he lacks the requisite specialized knowledge under Federal Rule of Evidence 702(a). Any attempt to disqualify Dr. Trask on the basis of his credentials alone would risk expending judicial goodwill on an argument unlikely to succeed, and would divert the Court's attention from the far more meritorious challenges to his methodology and the reliability of his opinions. Accordingly, our Daubert challenge should focus squarely on methodology and reliability, not qualifications.
B. Summary of Trask Opinions
Dr. Trask's expert report is organized into six discrete damages categories, which collectively yield the $95.4 million total damages figure. The following is a summary of each opinion.
1. Liquidated Damages Opinion ($67,230,000 Total)
Dr. Trask calculates liquidated damages based on the early termination formula set forth in Section 14.2 of the TSA. Under that provision, in the event of a termination that is not "for Cause" as defined in Section 13.1(a), Stonefield is obligated to pay Vantor a termination fee equal to 75% of the Annual Contract Value ("ACV") for each full remaining contract year, plus a pro rata portion for any partial year remaining. The ACV under the TSA is $43,200,000.
Dr. Trask applies this formula to the remaining term of the TSA as follows:
• Two full remaining contract years: 75% × $43,200,000 × 2 = $64,800,000
• Partial year (27 days): 75% × $43,200,000 × (27/365) ≈ $2,430,000
• Liquidated damages subtotal: $67,230,000
Dr. Trask opines that these amounts are owed under Section 14.2 because, in his opinion, Stonefield's termination of the TSA effective March 4, 2022 was not "for Cause" within the meaning of Section 13.1(a). As discussed in greater detail in Section IV.B below, this opinion embeds a legal and factual conclusion — whether the termination was or was not for Cause — that arguably exceeds the proper scope of expert testimony. However, the arithmetic itself is straightforward and not in dispute.
2. Lost Profits Opinion ($18,700,000)
Dr. Trask opines that Vantor, through its transportation subsidiary Vantor Transportation Services, LLC ("VTS"), would have earned an average 12% operating margin on the remaining committed volume under the TSA, which he estimates at approximately $86.4 million (two years multiplied by the $43.2 million ACV). This yields approximately $18,700,000 in lost profits that Dr. Trask claims Vantor would have earned over and above the liquidated damages amount, representing the incremental economic value of the contract relationship that is not captured by the Section 14.2 formula.
This is the opinion that presents the most significant methodological vulnerabilities and is the primary target of our Daubert analysis. As discussed at length in Section IV.A, Dr. Trask's 12% operating margin assumption is substantially higher than VTS's actual historical margins on the SLG account, and his failure to address VTS's own performance failures, mitigation obligations, and the duplicative nature of this claim alongside the liquidated damages claim renders this opinion unreliable.
3. Consequential Damages Opinions ($9,470,000 Combined)
Dr. Trask identifies three categories of consequential damages:
(a) Stranded Assets ($5,200,000). Dr. Trask opines that Vantor incurred $5,200,000 in damages attributable to the depreciation on tractors and trailers acquired specifically for the SLG contract, plus lease termination costs on certain equipment. His calculation employs a replacement cost depreciation methodology to determine the remaining economic value of the assets at the time of contract termination, and adds lease early-termination penalties for twelve trailer leases.
(b) Workforce Reduction Costs ($2,870,000). Dr. Trask opines that Vantor incurred $2,870,000 in costs related to the reduction in force of approximately 180 drivers and support staff that he attributes to the TSA termination. This figure includes severance payments, accrued vacation payouts, COBRA continuation subsidies, and estimated unemployment insurance cost increases.
(c) Mitigation Costs ($1,400,000). Dr. Trask opines that Vantor incurred $1,400,000 in costs associated with efforts to obtain replacement freight following the TSA termination, including brokerage fees, sales and marketing costs, and onboarding expenses for new accounts.
C. Key Documents Relied Upon by Trask
Dr. Trask's report identifies the following principal documents and data sources upon which he relied in forming his opinions:
• The TSA and all Schedules thereto, including Schedule B (rate structure and annual adjustments), Schedule C (exclusivity provisions and dedicated fleet commitments), and all amendments through the date of termination;
• Vantor's internal financial statements for fiscal years 2019 through 2022, including consolidated income statements, balance sheets, and segment-level reporting for VTS;
• VTS fleet records and depreciation schedules maintained by Vantor's asset management department;
• Vantor human resources records relating to the workforce reductions implemented in March and April 2022;
• The demand letter from Harrison Caldwell of Caldwell Royce & Shapiro LLP, plaintiff's former counsel, dated April 8, 2022, which set forth Vantor's initial damages claim; and
• Various publicly available transportation industry data, including freight market indices and carrier operating benchmarks.
Critically, Dr. Trask's report contains no reference to several categories of documents and data that are directly relevant to the reliability of his damages analysis:
• He does not reference or analyze Vantor's own performance data for Q4 2021, specifically the Service Level Objective ("SLO") metrics generated by SLG's Carrier Performance Portal, which demonstrate that VTS failed all five contractual performance benchmarks during the period immediately preceding termination;
• He does not reference or analyze VTS's Q4 2021 performance failures in any respect, treating the remaining contract term as if VTS would have performed at full contractual levels;
• He makes no reference to the Milescu November 12, 2021 email (Bates No. VHC-008417), an internal VTS communication from Dragos Milescu (VTS Regional Operations Manager) to Andrea Chen (VTS VP of Fleet Operations), in which Milescu confirms the reassignment of 85 tractors from SLG dedicated lanes to Northwind Distribution Co.'s account in October 2021, which directly precipitated the SLO failures that constituted the basis for Stonefield's termination for Cause.
These omissions are not merely gaps in documentation; they reflect fundamental methodological deficiencies in Dr. Trask's damages model, as his "but-for" analysis assumes a version of reality that is contradicted by VTS's own records and the testimony of its own employees. These omissions form the core of our Daubert arguments, as set forth in Section IV below.
III. Applicable Legal Standard
A. Daubert Framework (Fed. R. Evid. 702)
Under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and its progeny, the district court serves as a "gatekeeper" with the responsibility to ensure that expert testimony admitted at trial is both reliable and relevant. The gatekeeping function requires the court to make a preliminary assessment of whether the expert's reasoning or methodology underlying the testimony is scientifically valid and can properly be applied to the facts at issue. Id. at 592–93; see also Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147–49 (1999) (extending the Daubert gatekeeping obligation to all expert testimony, not only scientific testimony).
Federal Rule of Evidence 702, as amended effective December 1, 2023, codifies the Daubert framework and provides that a witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if the proponent demonstrates that it is more likely than not that:
(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert's opinion reflects a reliable application of the principles and methods to the facts of the case.
The Second Circuit has elaborated on the Daubert gatekeeping framework in Amorgianos v. National Railroad Passenger Corp., 303 F.3d 256 (2d Cir. 2002), and subsequent decisions. Under the Second Circuit's approach, the trial court must assess, among other factors: (1) whether the theory or technique the expert employs can be and has been tested; (2) whether it has been subjected to peer review and publication; (3) the known or potential rate of error; and (4) whether the theory or technique has gained general acceptance in the relevant scientific or professional community. See Daubert, 509 U.S. at 593–94; Amorgianos, 303 F.3d at 265–66. These factors are flexible and non-exclusive; the inquiry is context-specific and does not require the court to mechanically apply each factor in every case. Kumho Tire, 526 U.S. at 150.
A critical principle of the Daubert analysis is that the court should focus on the expert's methodology, not the conclusions the expert reaches. See Daubert, 509 U.S. at 595 ("The focus, of course, must be solely on principles and methodology, not on the conclusions that they generate."). However, the Supreme Court has also made clear that "nothing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence that is connected to existing data only by the ipse dixit of the expert." General Electric Co. v. Joiner, 522 U.S. 136, 146 (1997). Where the analytical gap between the data and the expert's opinion is too wide, the court may properly exclude the testimony as unreliable. Id.; see also Amorgianos, 303 F.3d at 267 ("The district court must . . . ensure that the expert's opinion is based on a reliable methodology rather than mere subjective belief or unsupported speculation.").
The proponent of the expert testimony bears the burden of establishing admissibility by a preponderance of the evidence. See Daubert, 509 U.S. at 592 n.10; Nimely v. City of New York, 414 F.3d 381, 396 (2d Cir. 2005).
B. Daubert Applied to Damages Experts
The Daubert gatekeeping function applies with full force to damages experts in commercial breach of contract cases. Courts in the Southern District of New York routinely scrutinize the methodologies employed by damages experts and have not hesitated to exclude damages opinions that fail to meet the reliability requirements of Rule 702 and Daubert. See, e.g., Boucher v. U.S. Suzuki Motor Corp., 73 F.3d 18, 21 (2d Cir. 1996) (affirming exclusion of damages expert whose methodology lacked analytical rigor); Lippe v. Bairnco Corp., 99 F. Supp. 2d 313, 332 (S.D.N.Y. 2000) (excluding damages opinion based on speculative assumptions unsupported by reliable data).
Several principles specific to the evaluation of damages experts are relevant to our analysis:
First, the expert must employ a methodology that reliably calculates damages flowing from the alleged breach, and not from exogenous market factors, the plaintiff's own conduct, or speculative assumptions untethered to reliable data. Where the expert fails to isolate the damages attributable to the defendant's allegedly wrongful conduct from damages attributable to other causes, the opinion is unreliable and subject to exclusion. See Raskin v. Wyatt Co., 125 F.3d 55, 67–68 (2d Cir. 1997); In re Fosamax Prods. Liab. Litig., 645 F. Supp. 2d 164, 192 (S.D.N.Y. 2009).
Second, under New York law — which governs this dispute pursuant to the choice-of-law provision in TSA Section 20.5 — lost profits must be proven with "reasonable certainty." See Kenford Co. v. County of Erie, 67 N.Y.2d 257, 261 (1986); Ashland Mgmt. Inc. v. Janien, 82 N.Y.2d 395, 403 (1993). This is a substantive standard under New York law that intersects with the Daubert reliability inquiry: an expert opinion on lost profits that rests on speculative assumptions or fails to establish damages with reasonable certainty may be excluded both because it fails to satisfy the Daubert reliability requirement and because it is legally insufficient to support a claim for lost profits under the governing law. See Schonfeld v. Hilliard, 218 F.3d 164, 172 (2d Cir. 2000) (noting that "the reasonable certainty standard requires the finder of fact to determine that it is 'reasonably certain' that the plaintiff would have obtained the projected profits in the absence of the alleged wrongful conduct").
Third, courts have the authority to exclude an expert's opinion in whole or in part. Partial exclusion — for example, excluding the lost profits opinion while permitting the liquidated damages testimony — is a well-established remedy under Daubert and Rule 702. See Daubert, 509 U.S. at 595–96; In re Rezulin Prods. Liab. Litig., 309 F. Supp. 2d 531, 546 (S.D.N.Y. 2004). This granular approach is particularly relevant here, as certain of Dr. Trask's opinions (notably the liquidated damages calculation) are arithmetically sound, while others (notably the lost profits opinion) suffer from fundamental methodological deficiencies.
IV. Analysis of Challengeable Opinions
A. Lost Profits Opinion ($18,700,000) — Strongest Ground for Exclusion
The lost profits opinion is the strongest candidate for a Daubert challenge. Dr. Trask's calculation suffers from four independent, mutually reinforcing deficiencies, each of which, standing alone, could support exclusion. Taken together, they present a compelling case that this opinion is not the product of reliable principles and methods reliably applied to the facts, as required by Rule 702 and Daubert.
1. Inflated and Unreliable Operating Margin Assumption
The most significant methodological flaw in Dr. Trask's lost profits opinion is his assumption that VTS would have earned a 12% operating margin on SLG freight for the remaining term of the TSA. This assumption is the linchpin of his $18.7 million lost profits figure, and it is unsupported by — and contradicted by — the actual historical financial data produced in this litigation.
Vantor's own financial statements, produced in discovery, show that Vantor generated FY 2021 revenue of approximately $385 million and FY 2022 revenue of approximately $310 million, reflecting a significant contraction attributable in part to broader market conditions in the trucking and logistics industry. More directly relevant, VTS's operating margins on the SLG account specifically, as reflected in internal VTS financial data produced in the supplemental document production on February 28, 2023, were as follows:
• Contract Year 1 (April 2019–March 2020): approximately 6.8% operating margin
• Contract Year 2 (April 2020–March 2021): approximately 7.2% operating margin
• Contract Year 3 (April 2021–January 2022, through date of termination): approximately 4.9% operating margin, reflecting the deterioration in VTS's performance and the increased costs associated with fleet mismanagement
Against this backdrop, Dr. Trask's assumption of a 12% operating margin is strikingly high — approximately 67% to 145% above the actual historical margins VTS achieved on this account during the three years it actually performed under the TSA. The report provides no adequate basis for this dramatic departure from the historical data. Upon close examination, the 12% figure appears to be derived from Vantor management's internal projections and five-year strategic plan, which projected margin improvements based on operational efficiencies that VTS had not yet achieved and, given its Q4 2021 performance trajectory, was unlikely ever to achieve. Dr. Trask does not adequately reconcile this aspirational figure with VTS's actual historical margins, nor does he explain why management projections that were never realized should be preferred over actual financial performance as the basis for a lost profits calculation.
Dr. Evelyn Rosser's rebuttal report, served on August 25, 2023 by our retained expert at Kensington Analytics Group LLC, identifies this as a critical methodological flaw. Dr. Rosser opines that using aspirational forward-looking projections rather than actual historical performance data as the basis for a lost profits calculation renders the opinion unreliable and inconsistent with generally accepted principles of forensic economics. Dr. Rosser further notes that the trend in VTS's actual margins was declining over the three contract years — from 6.8% to 7.2% and then sharply down to 4.9% — which makes the assumption of a 12% margin for future years not merely unsupported but affirmatively contradicted by the available evidence.
Under New York law, lost profits must be established with "reasonable certainty" and cannot be based on speculation or conjecture. See Kenford Co., 67 N.Y.2d at 261. The gap between the assumed 12% margin and the actual 4.9%–7.2% historical margins is not a matter of reasonable disagreement among experts; it reflects a fundamental disconnect between Dr. Trask's model and the reliable data available. The opinion is "connected to existing data only by the ipse dixit of the expert," which is precisely the circumstance the Supreme Court identified in Joiner as warranting exclusion. 522 U.S. at 146.
2. Failure to Account for Vantor's Own Breaches and Performance Failures
Dr. Trask's lost profits model assumes, without qualification or adjustment, that VTS would have performed the TSA at full ACV levels for the entire remaining term. This assumption is squarely contradicted by the undisputed evidence of VTS's performance during the period immediately preceding termination.
The SLG Carrier Performance Portal data, produced in discovery and verified through the deposition testimony of Martin Hess (Stonefield Director of Carrier Management, deposed June 14, 2023), demonstrates that VTS failed all five contractual Service Level Objectives in Q4 2021:
These are not marginal shortfalls. VTS failed every single SLO, in most cases by a wide margin. Equipment availability, in particular, was more than 20 percentage points below the contractual standard, reflecting the direct impact of VTS's unilateral decision to reassign 85 tractors from SLG dedicated lanes to the Northwind Distribution Co. account in October 2021. This reassignment is documented in the Milescu email of November 12, 2021 (Bates No. VHC-008417), in which Dragos Milescu (VTS Regional Operations Manager) confirmed to Andrea Chen (VTS VP of Fleet Operations) that the 85 tractors had been reassigned "to support Northwind's Q4 surge requirements" and acknowledged that this would "impact SLG service levels until we can source replacement units." VTS fleet records produced in supplemental discovery confirm that the reassignment occurred without notice to Stonefield and that replacement units were never sourced.
Dr. Trask's report does not reference any of this evidence. He does not address VTS's Q4 2021 SLO failures, the Milescu email, the tractor reassignment, or the possibility that — even in a "but-for" world in which Stonefield had not terminated the TSA — VTS's performance failures would have given Stonefield grounds for termination for Cause, or at minimum would have resulted in reduced volume commitments, rate adjustments, or contractual penalties that would have diminished the value of the contract to Vantor.
A reliable damages model in a breach of contract case must account for the plaintiff's own conduct that would have affected the value of the contract, even in the hypothetical "but-for" scenario. See Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 F.3d 89, 110 (2d Cir. 2007) (damages must be calculated net of factors that would have reduced the plaintiff's recovery even absent the breach). Dr. Trask's wholesale failure to incorporate VTS's documented performance failures and fleet diversion into his damages model renders his lost profits opinion methodologically unsound and unreliable under Daubert.
3. Failure to Conduct Meaningful Mitigation Analysis
Dr. Trask's report contains no analysis of Vantor's duty to mitigate its losses following the TSA termination, nor does it assess whether Vantor made reasonable efforts to replace the SLG volume after Stonefield terminated the agreement effective March 4, 2022. The report simply calculates lost profits on the remaining contract term as if no mitigation were possible or required.
Under New York law, a plaintiff has an affirmative duty to mitigate damages, and a defendant is entitled to a reduction in damages corresponding to the amount that the plaintiff could have avoided through reasonable efforts. See LNC Invs., Inc. v. First Fidelity Bank, N.A., 173 F.3d 454, 466 (2d Cir. 1999); Restatement (Second) of Contracts § 350 (1981). This duty is not merely a legal defense; it has direct implications for the reliability of an expert's damages calculation. A damages expert who fails to incorporate mitigation into a lost profits model produces an opinion that overstates the plaintiff's actual economic harm and is therefore unreliable.
The freight market conditions in Q1 and Q2 of 2022, the period immediately following the TSA termination, were robust by any measure. Industry data, including the Brightmoor Software and the Dunmore Systems, indicate that spot market rates were elevated approximately 35% above historical averages during this period, driven by sustained post-pandemic demand and persistent capacity constraints. This was, in short, an extraordinarily favorable market for carriers seeking to replace lost volume. Vantor, with approximately 650 tractors and 2,100 trailers available across its fleet, had substantial capacity to pursue replacement freight.
Despite these favorable conditions, there is no evidence that Vantor took meaningful steps to mitigate its losses. Derek Pruitt, Vantor's Vice President of Business Development, admitted during his July 10, 2023 deposition that he could not identify specific mitigation steps taken by Vantor after the TSA termination. When asked what Vantor did to replace the SLG volume, Pruitt testified: "We explored some options, but I couldn't point to specific contracts or accounts that we brought on as a result of losing SLG." (Pruitt Dep. Tr. at 187:12–16.) This testimony, combined with the absence of any documentary evidence of mitigation efforts in Vantor's production, strongly suggests that Vantor failed to mitigate — a fact that should be reflected in any reliable damages model.
A damages expert's failure to incorporate mitigation into a lost profits calculation is a recognized basis for exclusion under Daubert. An expert must present a net damages figure that reflects the plaintiff's obligation to minimize its losses; failure to do so renders the opinion unreliable because it does not measure the actual economic harm caused by the alleged breach. See Shatkin v. Meridian Group, 727 F.2d 202, 208 (2d Cir. 1984); Northpoint Group Labs., Inc. v. 10X Genomics, Inc., No. 19-cv-15896, 2023 WL 2612456, at *7 (S.D.N.Y. Mar. 23, 2023) (excluding damages opinion in part due to failure to account for plaintiff's mitigation obligations).
4. Duplicative of Liquidated Damages
Dr. Trask's report claims both liquidated damages of $67,230,000 and lost profits of $18,700,000, which together constitute $85,930,000 in alleged damages. Both categories purport to compensate Vantor for the same fundamental harm — the loss of the remaining economic value of the TSA.
Under New York law, a plaintiff cannot recover both liquidated damages, which are contractually agreed upon as a substitute for actual damages in the event of breach, and actual lost profits arising from the same breach. The entire purpose of a liquidated damages clause is to establish ex ante the measure of compensation for breach, precisely to avoid the need to prove actual damages. See Kestrel Corporation, 4 N.Y.3d 373, 380 (2005); Northpoint Holdings v. Purdy Corp., 41 N.Y.2d 354, 358 (1977) ("[T]he effect of an enforceable liquidated damages clause is to fix the amount of damages in advance, making it unnecessary to determine the actual amount of harm suffered."). Allowing a plaintiff to recover both the stipulated liquidated amount and its actual lost profits would provide double recovery for the same economic injury.
The inclusion of both liquidated damages and lost profits in a single damages figure is, at a minimum, a legal error that infects the reliability of Dr. Trask's overall damages model. It suggests either that Dr. Trask did not adequately consider the legal framework governing the relationship between liquidated damages and actual damages, or that he deliberately constructed a model designed to maximize the total damages figure without regard to the legal constraints on recovery. Either explanation undermines the reliability of his opinion.
This argument is developed in greater detail in Patrick Gallagher's February 15, 2023 Memorandum re Duplicative Damages — Liquidated Damages vs. Lost Profits, which we should incorporate by reference in any brief that raises this issue. The duplicative damages argument is both a Daubert reliability argument (the expert's methodology produces a result that is legally impossible) and a substantive legal argument (the plaintiff cannot recover both categories as a matter of law), which further supports our recommendation to present this argument in the context of summary judgment.
B. Liquidated Damages Opinion ($67,230,000) — Weaker Daubert Ground; Better Addressed as Legal Issue
Dr. Trask's liquidated damages calculation is a straightforward application of the Section 14.2 formula: 75% multiplied by the $43.2 million ACV multiplied by the remaining contract term. The arithmetic is not in dispute. Dr. Trask correctly identifies the relevant contractual provision, applies the stated formula, and arrives at a figure that is mathematically accurate. There is no meaningful Daubert challenge to the mechanics of this calculation.
The challenge to the liquidated damages lies not in Dr. Trask's methodology but in the enforceability of the clause itself as a matter of law — specifically, whether the Section 14.2 liquidated damages clause constitutes an unenforceable penalty under New York law. This is a pure legal question that is properly addressed on summary judgment, not through a Daubert motion directed at the expert's methodology.
To be sure, Dr. Trask does assume, without conducting any independent analysis, that the termination was not "for Cause" under Section 13.1(a). This is a legal and factual conclusion that arguably exceeds the proper scope of expert testimony, as it requires the expert to interpret the TSA's termination provisions and apply them to the facts of the case — a task reserved for the Court and the jury. However, courts in this district frequently permit damages experts to testify on the basis of assumed liability scenarios — i.e., "If the termination was not for Cause, then the liquidated damages amount to X" — and a challenge on this ground alone is unlikely to succeed, particularly given the prevalence of this practice in commercial litigation. See, e.g., In re Aluminum Warehousing Antitrust Litig., 336 F.R.D. 5, 47 (S.D.N.Y. 2020) (noting that experts may testify on damages under assumed scenarios).
Recommendation: The liquidated damages enforceability challenge should be addressed through our summary judgment motion, as outlined in the September 15, 2023 Summary Judgment Roadmap Memorandum, and not through a standalone Daubert motion. Our September 19, 2022 Memorandum re Enforceability of Liquidated Damages Clause Under New York Law concluded that there is a "moderate" probability of obtaining an unenforceability finding, noting New York courts' general reluctance to override freely negotiated liquidated damages provisions in commercial agreements between sophisticated parties, but also identifying the potentially disproportionate relationship between the 75%-of-ACV formula and the actual damages that Stonefield's termination would be expected to cause. This argument is best developed in the summary judgment context, where it can be presented alongside the for-Cause termination defense and the consequential damages waiver.
C. Consequential Damages Opinions ($9,470,000 Combined) — Viable but Best Combined with Section 15.1 Argument
Dr. Trask's three consequential damages categories — stranded assets ($5,200,000), workforce reduction costs ($2,870,000), and mitigation costs ($1,400,000) — total $9,470,000. While each of these opinions contains some methodological vulnerabilities, the most effective challenge to these categories is not Daubert but the mutual consequential damages waiver in TSA Section 15.1.
Section 15.1 of the TSA provides, in relevant part:
"IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY BREACH THEREOF, INCLUDING BUT NOT LIMITED TO LOST PROFITS (OTHER THAN PROFITS DIRECTLY LOST ON COMMITTED VOLUMES UNDER THIS AGREEMENT), LOSS OF BUSINESS, COSTS OF PROCUREMENT OF SUBSTITUTE SERVICES, OR SIMILAR DAMAGES, REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE AND REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES."
If the Court enforces Section 15.1, the stranded assets, workforce reduction costs, and mitigation costs are barred as a matter of contract law, regardless of whether Dr. Trask's methodology for calculating them is reliable under Daubert. This is a threshold legal argument that renders the methodological challenge secondary. Our April 5, 2023 Memorandum re Damages Cap Under TSA Section 15.1 analyzes the enforceability of this provision and concludes that it is likely enforceable under New York law as a freely negotiated limitation of liability between sophisticated commercial parties. The Section 15.1 argument should be the lead attack on these categories in our summary judgment briefing.
Notwithstanding the primacy of the Section 15.1 argument, Dr. Trask's methodology for calculating the consequential damages categories does contain vulnerabilities that could support a Daubert challenge if the Court declines to enforce Section 15.1:
Stranded Assets ($5,200,000). Dr. Trask uses a replacement cost depreciation methodology rather than actual book value depreciation from VTS's own accounting records. Replacement cost depreciation yields a higher residual value at the time of termination (and therefore a higher claimed loss) than book value depreciation. Moreover, Dr. Trask does not account for the residual value or redeployment potential of the tractors and trailers that he characterizes as "stranded." These were not SLG-specific assets in any meaningful sense; they were standard over-the-road tractors and dry van trailers that could be (and in many cases were) deployed on other routes and customer accounts. The failure to consider redeployment overstates the actual economic loss attributable to the TSA termination.
Workforce Reduction Costs ($2,870,000). Dr. Trask includes severance and related costs for approximately 180 employees, all of which he attributes to the TSA termination. However, he does not analyze whether these employees were terminated as a direct result of the loss of the SLG account or as part of broader workforce reductions at Vantor during this period. Vantor's revenue dropped from approximately $385 million in FY 2021 to approximately $310 million in FY 2022, a decline of approximately $75 million, of which the SLG account represented approximately $43.2 million (or 58% of the total decline). The remaining $31.8 million in revenue decline was attributable to market factors entirely unrelated to the TSA termination. Without a reliable attribution analysis, it is impossible to determine what portion of the workforce reduction costs is causally linked to the TSA termination as opposed to broader market-driven contraction. Dr. Trask's failure to conduct this analysis renders his workforce reduction opinion unreliable.
Mitigation Costs ($1,400,000). The calculation of mitigation costs is relatively straightforward and less vulnerable to a methodological challenge. The primary basis for exclusion of this category is the Section 15.1 waiver, not Daubert.
Recommendation: These methodological issues could support a Daubert challenge, but they are more efficiently and effectively addressed in summary judgment briefing alongside the Section 15.1 argument. Leading with the contractual waiver — a threshold legal defense — is tactically superior to leading with a methodological critique, as it requires no expert testimony to support and shifts the burden to Vantor to demonstrate that Section 15.1 is unenforceable.
V. Strategic Considerations: Standalone Daubert Motion vs. Combined Summary Judgment
The threshold strategic question for the team is not whether we can bring a Daubert challenge — we clearly can, particularly as to the lost profits opinion — but whether we should file a standalone Daubert motion at this stage of the litigation, or instead preserve our arguments for incorporation into summary judgment briefing. After careful consideration of the relevant factors, I recommend the latter approach.
A. Arguments for Filing a Standalone Daubert Motion
There are meaningful arguments in favor of filing a standalone Daubert motion, and I do not dismiss them lightly:
Narrowing the damages case before dispositive motions. If successful, exclusion of Dr. Trask's opinions — or even a partial exclusion of the lost profits and consequential damages opinions — before summary judgment would dramatically narrow Vantor's damages case. If the lost profits ($18,700,000) and consequential damages ($9,470,000) are excluded, Vantor's remaining claim would be limited to the liquidated damages of $67,230,000, which itself is subject to our enforceability challenge. This narrowing could simplify the summary judgment analysis and potentially position us for a dispositive ruling on damages.
Settlement leverage. Excluding a significant portion of Vantor's damages claim would provide substantial leverage in any future settlement discussions. As the case currently stands, Vantor's total claimed damages of $95.4 million dwarf Stonefield's settlement authority. Per Samuel Eklund's November 15, 2022 email to Alison Trang and Douglas Whitmore (Ridgeline Capital Partners' in-house team), Ridgeline agreed to settlement authority in the range of $0 to $4.5 million but expressed a preference for aggressive defense of the case. A ruling excluding a substantial portion of Vantor's damages claim could create the conditions for a resolution within or near Ridgeline's authorized range.
Demonstrating aggressive defense posture. Filing a standalone Daubert motion would be consistent with Ridgeline Capital Partners' stated preference for an aggressive defense strategy. As the majority equity holder in Stonefield, Ridgeline has been actively engaged in litigation strategy decisions, and a visible demonstration of offensive litigation conduct may satisfy Ridgeline's expectations regarding the vigor of the defense.
B. Arguments Against Filing a Standalone Daubert Motion (Preferred Approach)
Notwithstanding the potential benefits, I believe the arguments against a standalone Daubert motion are materially stronger at this juncture, for the following reasons:
Telegraphing our summary judgment strategy. A standalone Daubert motion would necessarily reveal the precise nature of our attack on Dr. Trask's methodology, including the specific deficiencies we have identified in the margin assumptions, the failure to account for VTS's performance failures, the absence of mitigation analysis, and the duplication with liquidated damages. This would effectively hand Vantor (or any successor counsel that may eventually appear) a detailed roadmap of our arguments, providing an opportunity to cure or supplement the expert report before summary judgment. Under Federal Rule of Civil Procedure 26(e), a party has a continuing obligation to supplement expert disclosures, and courts have discretion to permit supplemental or amended expert reports under appropriate circumstances. Although the discovery period has closed, a court could exercise its discretion to permit a limited supplementation if the party demonstrates good cause. Filing a standalone Daubert motion before summary judgment creates a risk that we provoke precisely this scenario. If Vantor retains new counsel — though, as discussed below, this appears increasingly unlikely — a standalone Daubert motion could trigger a request to serve a supplemental or amended expert report, potentially curing the deficiencies we have identified and neutralizing the very arguments we had hoped to deploy.
Procedural efficiency and judicial preference. Combining Daubert arguments with summary judgment briefing is common and accepted practice in the Southern District of New York. Many judges in this district — including Judge Miranda K. Calloway, to whom this case is assigned — prefer to address expert admissibility issues in the context of dispositive motions rather than in standalone proceedings. Judge Calloway's Individual Practices and Rules, updated as of January 2023, expressly provide that "Daubert issues may be raised in conjunction with motions for summary judgment and need not be the subject of a separate motion unless the Court orders otherwise." Filing a standalone motion in the face of this guidance risks appearing either unfamiliar with the Court's preferences or tactically motivated, neither of which serves our interests.
The case is effectively dormant. The single most significant factor weighing against a standalone Daubert motion is the current posture of the case. Since Caldwell Royce & Shapiro LLP's motion to withdraw as counsel for Vantor was granted on October 18, 2023 — following a fee dispute in which Vantor owed Caldwell Royce approximately $870,000 in unpaid invoices — Vantor has been without legal representation. The Court set an initial deadline of December 17, 2023 for Vantor to retain substitute counsel, which Vantor failed to meet. The Court then granted an extension to April 12, 2024, which Vantor also failed to meet. On February 12, 2024, Nikolai Vantorovich — Vantor's founder and principal — appeared pro se at a status conference, but the Court correctly noted that a corporation such as Vantor Holdings Corp. cannot appear pro se in federal court and must be represented by counsel. See Rowland v. California Men's Colony, 506 U.S. 194, 202 (1993); Jones v. Niagara Frontier Transp. Auth., 722 F.2d 20, 22 (2d Cir. 1983). There has been no docket activity since February 12, 2024.
In light of this posture, filing any substantive motion at this stage may be premature. The more immediate question is whether the case will be dismissed for failure to prosecute under Federal Rule of Civil Procedure 41(b). Our team has already prepared a Draft Motion to Dismiss for Failure to Prosecute, circulated on January 15, 2024, and the January 10, 2025 Memorandum — Options for Case Resolution analyzes the various procedural pathways for bringing this case to a close. Investing in a standalone Daubert motion when the case may be dismissed on procedural grounds in the near term is not an efficient use of client resources.
Resource conservation and cost-benefit analysis. A standalone Daubert motion would require substantial additional work, including the preparation of a full brief (likely 25–30 pages), a statement of material facts, supporting declarations and exhibits, potential reply briefing, and oral argument before Judge Calloway. Based on our experience with similar motions in this district, the estimated cost of preparing and arguing a standalone Daubert motion would be in the range of $150,000 to $225,000 in attorney fees and expert consulting fees (including time for Dr. Rosser to prepare a declaration in support). These costs would be in addition to the approximately $4.42 million already expended on this matter — consisting of $3.8 million in attorney fees and approximately $620,000 in costs and disbursements through October 2023. Given the strong probability of dismissal for failure to prosecute, the cost-benefit analysis weighs heavily against investing in a standalone Daubert motion at this time.
Strength of our rebuttal expert. Dr. Evelyn Rosser's rebuttal expert report, served on August 25, 2023 through Kensington Analytics Group LLC, provides a comprehensive counter-opinion that effectively neutralizes the most significant of Dr. Trask's opinions. Dr. Rosser opines that if the termination was valid for Cause under Section 13.1(a), Vantor is entitled to $0 in damages. In the alternative, even under a lost-profits theory assuming wrongful termination, Dr. Rosser opines that the maximum damages to which Vantor could be entitled are $8,200,000, after adjusting for VTS's own breaches and performance failures, Vantor's failure to mitigate, and proper market-based margin calculations using actual historical data rather than management projections. This rebuttal effectively reduces the claimed damages by more than 91% (from $95.4 million to $8.2 million) through competing expert testimony. At trial, this "battle of the experts" approach — presenting Dr. Rosser's well-grounded rebuttal against Dr. Trask's inflated figures — may be more persuasive to the trier of fact than the outright exclusion of Dr. Trask's testimony, which could be perceived by a jury as a procedural maneuver that prevented them from hearing the full picture.
VI. Specific Daubert Arguments to Preserve for Summary Judgment Briefing
Regardless of whether a standalone Daubert motion is ultimately filed, the following specific arguments should be preserved and incorporated into our summary judgment briefing, as applicable. These arguments are organized by damages category and priority.
A. Arguments for Exclusion of Lost Profits Opinion
The following five arguments should be presented to the Court in support of excluding, or at minimum disregarding, Dr. Trask's lost profits opinion of $18,700,000:
1. The 12% operating margin assumption is unsupported by VTS's actual historical margins on the SLG account, which ranged from 4.9% to 7.2% over the three contract years, and relies instead on speculative management projections that were never realized. The analytical gap between the assumed margin and the actual data is too wide to satisfy the reliability requirements of Rule 702 and Daubert. See General Electric Co. v. Joiner, 522 U.S. at 146.
2. Dr. Trask fails to account for VTS's own material breaches and performance failures — specifically, VTS's failure of all five SLOs in Q4 2021, including on-time pickup (78.2% vs. 95% standard), on-time delivery (81.6% vs. 93% standard), tender acceptance (71.4% vs. 90% standard), equipment availability (62% vs. 85% standard), and cargo claims ratio (1.07% vs. ≤0.5% standard) — which would have reduced the value of the contract even absent Stonefield's termination. A damages model that ignores the plaintiff's own conduct is methodologically unsound.
3. Dr. Trask fails to incorporate any mitigation analysis despite the existence of highly favorable freight market conditions in Q1–Q2 2022 (spot rates approximately 35% above historical averages) and Vantor's own admission through the deposition testimony of Derek Pruitt (July 10, 2023) that no specific mitigation steps were taken following the TSA termination. A lost profits opinion that fails to account for the plaintiff's duty to mitigate does not reliably measure the actual economic harm caused by the alleged breach.
4. The lost profits claim is duplicative of the liquidated damages claim under New York law. A plaintiff cannot recover both liquidated damages, which substitute for actual damages, and actual lost profits arising from the same breach. The inclusion of both categories in Dr. Trask's total damages figure represents either a methodological error or a legal error that infects the reliability of the overall damages model. See Kestrel Corporation, 4 N.Y.3d 373, 380 (2005).
5. Dr. Trask's "but-for" world assumes full performance by VTS for the remaining contract term, which is contradicted by the undisputed evidence that VTS diverted 85 tractors from SLG dedicated lanes to the Northwind Distribution Co. account in October 2021 without notice to Stonefield (per the Milescu November 12, 2021 email, VHC-008417, and supplemental fleet records) and experienced systemic performance deterioration across all five SLOs. A "but-for" analysis that ignores these facts does not reflect a reliable application of accepted principles and methods to the facts of this case.
B. Arguments for Partial Exclusion of Consequential Damages Opinions
The following arguments should be presented in connection with the consequential damages categories, in tandem with our primary Section 15.1 contractual waiver argument:
1. Dr. Trask's stranded assets calculation employs a replacement cost depreciation methodology that overstates the economic loss by ignoring VTS's own book value depreciation schedules and, more significantly, ignores the residual value and redeployment potential of the tractors and trailers, which were standard industry equipment capable of deployment on other routes and customer accounts.
2. Dr. Trask's workforce reduction costs are not reliably attributed to the TSA termination as opposed to broader market-driven contraction at Vantor. VTS's parent company experienced a $75 million revenue decline in FY 2022, of which only approximately $43.2 million (58%) was attributable to the loss of the SLG account. Without a causation analysis isolating the TSA-related portion of the workforce reductions from the market-driven portion, the opinion is unreliable.
3. All three consequential damages categories — stranded assets, workforce reduction costs, and mitigation costs — are subject to the mutual consequential damages waiver in TSA Section 15.1, which is a threshold legal argument that renders the methodological challenges secondary. The Section 15.1 argument should be presented first, with the Daubert arguments as an alternative ground.
C. Arguments We Should NOT Raise
Equally important to identifying the arguments we should make is identifying the arguments we should avoid, in order to preserve credibility with the Court and avoid wasting judicial resources:
1. We should not challenge Dr. Trask's qualifications. His credentials — a Ph.D. in economics from Columbia, extensive publication history, and approximately thirty-five prior qualifications as an expert in federal and state courts — are more than adequate to satisfy the threshold requirements of Rule 702(a). A credentials-based challenge would almost certainly fail and would waste judicial goodwill that is better spent on the more meritorious methodological challenges.
2. We should not challenge the arithmetic of the liquidated damages calculation. The formula (75% × ACV × remaining years) is explicitly set forth in TSA Section 14.2, and Dr. Trask has correctly applied it. The issue with the liquidated damages is the legal enforceability of the clause itself — whether it constitutes an unenforceable penalty under New York law — not the expert's mathematical competence. Challenging the calculation rather than the clause would mischaracterize the nature of our argument and could confuse the Court.
VII. Coordination with Summary Judgment Roadmap
The Daubert arguments identified in this memorandum should be coordinated with the broader summary judgment strategy outlined in the September 15, 2023 Summary Judgment Roadmap Memorandum. That memorandum organizes our dispositive motion arguments into four principal pillars:
Pillar 1: Valid termination for Cause based on undisputed SLO failures in Q4 2021 and VTS's failure to cure following the December 3, 2021 Notice of Default.
Pillar 2: Unenforceability of the Section 14.2 liquidated damages clause as an impermissible penalty under New York law.
Pillar 3: Bar on consequential damages under the mutual waiver in TSA Section 15.1.
Pillar 4: Vantor's failure to mitigate its damages following the TSA termination.
The Daubert arguments regarding Dr. Trask's lost profits opinion map directly to Pillars 1, 2, and 4 of the summary judgment roadmap. Specifically:
• The argument that Dr. Trask fails to account for VTS's own performance failures (Section VI.A, Argument Nos. 2 and 5 above) supports and reinforces Pillar 1 (valid termination for Cause), because the same evidence of VTS's SLO failures that establishes Stonefield's right to terminate for Cause also demonstrates that Dr. Trask's "but-for" world is built on a false premise.
• The argument that the lost profits claim is duplicative of liquidated damages (Section VI.A, Argument No. 4 above) supports and reinforces Pillar 2 (unenforceability of liquidated damages), because both arguments require the Court to examine the relationship between the Section 14.2 formula and Vantor's actual economic harm.
• The argument that Dr. Trask fails to incorporate mitigation analysis (Section VI.A, Argument No. 3 above) supports and reinforces Pillar 4 (failure to mitigate), because the same evidence of favorable market conditions and Vantor's inaction that supports the mitigation defense also demonstrates the unreliability of Dr. Trask's damages model.
The Daubert arguments regarding the consequential damages opinions map to Pillar 3 (Section 15.1 waiver). The contractual waiver is the threshold argument; the methodological deficiencies in Dr. Trask's stranded assets and workforce reduction opinions serve as alternative grounds for excluding those opinions if the Court declines to enforce Section 15.1.
Recommendation: Our summary judgment brief should include a dedicated section, which I would propose titling "Exclusion or Disregard of Dr. Trask's Unreliable Damages Opinions," that presents combined Daubert and merits arguments in an integrated fashion. This section should be supported by:
• Dr. Rosser's August 25, 2023 rebuttal expert report and a supporting declaration addressing the specific methodological deficiencies in Dr. Trask's opinions;
• The deposition testimony of Derek Pruitt (July 10, 2023), particularly his admissions regarding the absence of specific mitigation efforts following the TSA termination;
• The deposition testimony of Dragos Milescu (June 22, 2023), particularly his admissions regarding the October 2021 reassignment of 85 tractors to the Northwind Distribution Co. account;
• The deposition testimony of Martin Hess (June 14, 2023), who verified the Q4 2021 SLO metrics from Stonefield's Carrier Performance Portal; and
• The underlying documentary evidence, including the Milescu November 12, 2021 email (VHC-008417), VTS fleet records, the Carrier Performance Portal data, and VTS's historical financial records showing actual operating margins on the SLG account.
This integrated approach will allow the Court to assess the reliability of Dr. Trask's opinions in the context of the substantive legal questions that determine the scope of recoverable damages, producing a more efficient and more persuasive presentation than a standalone Daubert motion followed by a separate summary judgment brief.
VIII. Conclusion and Recommendation
Based on the analysis set forth in this memorandum, I conclude as follows:
1. There are viable *Daubert* grounds to seek exclusion of Dr. Trask's lost profits opinion ($18,700,000). The opinion relies on an inflated and unsupported 12% operating margin assumption, fails to account for VTS's own material breaches and systemic performance failures, omits any analysis of Vantor's duty and ability to mitigate, and is duplicative of the liquidated damages claim. These deficiencies, individually and collectively, render the lost profits opinion unreliable under Rule 702 and Daubert.
2. There are secondary *Daubert* grounds to challenge the consequential damages opinions ($9,470,000 combined), specifically the stranded assets calculation (improper depreciation methodology and failure to account for redeployment) and the workforce reduction costs (unreliable attribution to TSA termination versus market factors). However, these challenges are more efficiently and effectively addressed through the TSA Section 15.1 consequential damages waiver argument, which provides a threshold legal bar to all three consequential damages categories.
3. The liquidated damages calculation ($67,230,000) is not well-suited for a *Daubert* challenge. The arithmetic is correct, and the relevant issue — whether the Section 14.2 liquidated damages clause constitutes an unenforceable penalty — is a question of law, not a question of expert reliability. This issue should be addressed exclusively through summary judgment.
4. Primary recommendation: Do not file a standalone *Daubert* motion at this time. Instead, preserve all Daubert arguments for incorporation into summary judgment briefing if and when the case resumes. Given the current dormancy of the case — no docket activity since February 12, 2024, Vantor without counsel, and FRCP 41(b) dismissal probable — investing in standalone Daubert briefing is not cost-justified. The estimated $150,000–$225,000 cost of a standalone motion, layered on top of the $4.42 million already spent, cannot be justified when there is a strong probability that the case will be dismissed for failure to prosecute.
5. Contingency: If Vantor retains new counsel and the case is reactivated, we should immediately revisit the standalone Daubert question at that time. In that scenario, a standalone motion would be most effective if filed simultaneously with, or immediately before, our summary judgment motion, in order to prevent Vantor from curing the deficiencies i

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