Chandler Gas and Store Incorporated et al v. Treasure Franchise Company LLC et al

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Chandler Gas and Store Incorporated, et al.,
Plaintiffs,
v.
Treasure Franchise Company LLC, et al.,
Defendants.
No. CV-23-00400-PHX-KML
ORDER
The upcoming trial between plaintiffs (collectively “Chandler Gas”) and
defendants (collectively “Marathon”) centers on alleged point-of-sale machine operating
system malfunctions at Chandler Gas. Both sides filed expert-exclusion motions:
Chandler Gas moves to exclude the opinions of John Umbeck and Marathon moves to
exclude the opinions of Max McDevitt. (Docs. 186; 192.) The motion to exclude
Umbeck’s testimony is granted in part and denied in part. The motion to exclude
McDevitt’s testimony is denied.
I. Legal Standard
a. Daubert Motions
Federal Rule of Evidence 702 governs the admission of expert testimony. The rule
permits a qualified expert to offer opinions if the proponent shows “it is more likely than
not” that the testimony rests on sufficient facts or data, reliable methods, and a reliable
application of those methods to the case and the expert’s scientific, technical, or other
specialized knowledge will help the trier of fact. See Fed. R. Evid. 702. The proponent
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 1 of 16

- 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
bears the burden of establishing admissibility. Bldg. Indus. Ass’n of Wash. v. Wash. State
Bldg. Code Council, 683 F.3d 1144, 1154 (9th Cir. 2012).
Rule 702 embraces a broad understanding of expert qualifications. Hangarter v.
Provident Life & Acc. Ins. Co., 373 F.3d 998, 1015 (9th Cir. 2004). Relevant professional
experience may establish the “minimal foundation” required. Id. at 1015–16. “Unlike an
ordinary witness, an expert is permitted wide latitude to offer opinions, including those
that are not based on firsthand knowledge or observation.” Daubert v. Merrell Dow
Pharm., Inc., 509 U.S. 579, 592 (1993) (internal citation omitted). That latitude “is
premised on an assumption that the expert’s opinion will have a reliable basis in the
knowledge and experience of his discipline.” Id.
The Rule 702 inquiry is flexible and focuses on principles and methodology, not
the conclusions drawn from them. Id. at 594–95. The inquiry has two components:
relevance and reliability. Id. at 589–92. Evidence is relevant if it has “any tendency to
make the existence of any fact that is of consequence to the determination of the action
more probable or less probable than it would be without the evidence.” Id. at 587
(quoting Fed. R. Evid. 401) (simplified). This relevance standard is liberal. Id.
The reliability threshold is likewise broad. “Shaky but admissible evidence is to be
attacked by cross examination, contrary evidence, and attention to the burden of proof,
not exclusion.” Primiano v. Cook, 598 F.3d 558, 564 (9th Cir. 2010). Courts must
“screen the jury from unreliable nonsense opinions, but not exclude opinions merely
because they are impeachable.” Alaska Rent-A-Car, Inc. v. Avis Budget Grp., Inc., 738
F.3d 960, 969 (9th Cir. 2013).
The court has broad discretion in assessing reliability and deciding how to
evaluate it. United States v. Hankey, 203 F.3d 1160, 1168 (9th Cir. 2000). Considerations
may include whether the theory or technique can be tested, whether it has been subject to
peer review, its known or potential rate of error, and its general acceptance in the relevant
field. Daubert, 509 U.S. at 593–94. These factors are not exhaustive, nor must they apply
in every case. Hankey, 203 F.3d at 1168. When reliability depends primarily on an
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 2 of 16

- 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
expert’s experience, these factors may carry less weight. Id. at 1169 (“[T]he Daubert
factors . . . simply are not applicable to [testimony] whose reliability depends heavily on
the knowledge and experience of the expert, rather than the methodology or theory
behind it.”). Ultimately, the court must determine whether the proffered testimony is
grounded in an accepted body of knowledge and supported by reliable reasoning rather
than speculation.
II. Chandler Gas’s Motion to Exclude Umbeck
a. Umbeck’s Opinions
Umbeck is a professor of economics at Purdue University who has more than 40
years of experience researching the petroleum industry and the marketing of petroleum
products. (Doc. 186-1 at 6.) Umbeck explains he was retained by Marathon to determine
whether Chandler Gas was profitable and the amount of damages the business might have
incurred due to the alleged point-of-sale problems. (Doc. 186-1 at 7.) Based on his review
of “all of the available information” (Doc. 186-1 at 34), Umbeck drew eight
“conclusions,” which the court will treat as the opinions Umbeck hopes to offer at trial:
1. The Chandler station was profitable when operated by Prima Investments.
2. The Chandler station was profitable when operated by the McCullochs.
3. The financial data shows no evidence of any significant financial harm to the
station during the time of the alleged failure of the operating system.
4. The actual computer problems, using Verifone data, shows no evidence of any
significant loss of gasoline sales.
5. The customer reviews show no evidence of customers being upset about any
inconvenience caused by the computer problems.
6. Based on opinions 3–5, the alleged failure of the operating system would have no
significant negative impact on the expected future revenues or the market value of
the business when sold.
7. The business experienced a significant decrease in the volume of fuel it sold,
compared to the sales when operated by Prima. However, these lost fuel sales
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 3 of 16

- 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
were caused by the new retail pricing policy implemented by the McCullochs and
not the alleged problems with the operating system.
8. Any loss in value the business might have incurred during this time period was
caused by the plaintiffs.
(Doc. 186-1 at 9.) Chandler Gas appears to seek the exclusion of all of Umbeck’s
testimony because he “is not qualified, his opinions are not reliable, and they would not
be helpful to the jury.” (Doc. 186 at 5.) But Chandler Gas focuses on excluding what it
identifies as Umbeck’s “causation opinions” involving what damage was caused by the
operating system failures. (Doc. 186 at 5, 10–21.) Additionally, Chandler Gas seeks to
fully exclude Umbeck’s rebuttal report on the basis it merely rehashes his original expert
report rather than contradicting or rebutting McDevitt’s report. (Doc. 186 at 20.)
b. Analysis
Umbeck holds a doctorate in economics, has taught in that field for more than four
decades, and has an extensive background in petroleum industry economics and
marketing. (Doc. 186-1 at 6.) He has published scholarship in economics, consulted with
industry participants, and previously testified as an expert in matters involving petroleum
marketing and profitability. (Doc. 186-1 at 6.) These qualifications are sufficient to
establish the “minimal foundation” required under Rule 702 for testimony regarding
business profitability, pricing decisions, market forces, and other related economic issues
affecting fuel sales. See Hangarter, 373 F.3d at 1015–16.
Opinions 1 and 2 Regarding Profitability
Chandler Gas argues Umbeck’s first two opinions should be excluded because
they are not relevant. (Doc. 186 at 8.) Those opinions address the profitability of the
station under its prior owner (Prima) and then once Chandler Gas took over. Chandler
Gas claims hundreds of thousands of dollars in damages based on alleged lost sales
volume. (Doc. 205 at 10.) Umbeck’s opinion that the station was profitable during the
relevant period and that observed volume declines are more consistent with pricing
decisions than computer outages bears directly on causation and damages.
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 4 of 16

- 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Evidence of profitability is relevant because it provides economic context against
which the jury can assess the plausibility and magnitude of Chandler Gas’s claimed
losses. A central issue to this case is whether any alleged operating system outages
actually caused a measurable financial impact. Evidence showing the operations before
Chandler Gas assumed control and that the business remained profitable during the
relevant period will assist the jury in understanding the evidence or determining a fact in
issue. Daubert, 509 U.S. at 591; see also Hangarter, 373 F.3d at 1017. And although
profitability alone does not disprove damages, it is probative of whether the alleged
operating system issues caused significant economic harm, and the weight to be given to
that evidence is a matter for the jury, not a basis for exclusion. See Primiano, 598 F.3d
558, 564 (9th Cir. 2010) (holding issues of weight and credibility are for cross-
examination and not exclusion). This testimony provides relevant background and
probative evidence that may assist the jury in evaluating the scale of Chandler Gas’s
claimed damages.
Accordingly, Umbeck’s Opinions 1 and 2 on profitability are relevant and
admissible.
Opinions 3 and 4 Regarding Operating System Failures
Umbeck concludes the alleged failures of the operating system did not cause
significant financial harm or loss of gasoline sales. (Doc. 186-1 at 9.) Chandler Gas
argues Umbeck failed “to consider probative information regarding the frequency and
severity of Operating System failure/outages, rendering his opinions unreliable.” (Doc.
186 at 10–11.) Chandler Gas also contends Umbeck’s purported methodology is
unreliable because the Verifone logs are incomplete, the fifteen-minute threshold
Umbeck used is arbitrary, and Umbeck is not qualified to interpret technical outage data.
(Doc. 186 at 12.)
To determine the impact the operating system had on sales, Umbeck looked
exclusively to “a Verifone log” that included 75 problems each assigned a unique case
number. (Doc. 186-1 at 16.) He does not explain why he only looked at Verifone logs and
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 5 of 16

- 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
did not consider other sources that could have demonstrated system outages. (Doc. 186-3
at 15.) The majority of Verifone problems were, according to Umbeck, “resolved in 5
minutes or less.” (Doc. 186-1 at 16.) Apparently based solely on his personal experience
with computer problems, Umbeck contends customers do not leave a station and go
elsewhere if a problem can be resolved within five minutes. (Doc. 186-1 at 16.) Umbeck
provides no evidentiary basis for this five-minute view of consumer behavior. Umbeck
then identified the problems that “took more than 15 minutes to resolve.” (Doc. 186-1 at
19.) (He does not explain why he ignores those problems that took between five and
fifteen minutes to resolve.) Of the problems lasting fifteen minutes or more, Umbeck
concludes “[m]ost of these events do not appear to stop customers from buying fuel or
store items. They may not be able to pay at the pump but they can still pay in the store.”
(Doc. 186-1 at 20.) Neither Marathon nor Umbeck’s report itself meaningfully explain
how Umbeck is qualified to offer these opinions.
Umbeck’s opinions based on his “analysis of the actual computer problems”
cannot be admitted. Umbeck admitted he has no expertise or specialized knowledge to
understand computer system issues. (Doc. 186-3 at 11 (Umbeck stating he is “definitely
not” an IT expert and would not hold himself out as qualified to interpret system outage
logs or related technical evidence).) And Marathon’s attempt to offer Umbeck as
qualified on this front is inexplicable. Without some technical understanding of the
“Verifone logs” and precisely what they were reflecting, Umbeck has no basis for his
alleged “analysis” of those problems.
But even assuming Umbeck were qualified to analyze computer problems, he has
not explained how he has any expertise in consumer behavior and provides no basis for
his assumption that a delay of less than five minutes would have no impact. Similarly, the
record reveals no proper basis for Umbeck’s unexplained decision to impose an arbitrary
fifteen-minute cutoff for identifying potentially impactful events. Even more, Umbeck
fails to conduct any analysis to demonstrate a connection between his fifteen-minute-or-
longer problem list and Chandler Gas’s fuel sales or finances. The closest he comes to
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 6 of 16

- 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
connecting his questionably-identified Verifone issues to financial consequences is a
single reference to OPIS data showing Chandler Gas sold fuel each day between May 13,
2022 and May 16, 2022 (a period of one of his fifteen-plus-minute outages). (Doc. 186-
1.) And beyond failing to tie the Verifone issues to any financial outputs, Umbeck
provides zero support for the reliability of his methodology. His background alone will
not overcome such an astounding failure. See United States v. Valencia-Lopez, 971 F.3d
891, 898–900 (9th Cir. 2020).
Finally, Umbeck seems to expect the court and factfinders to draw meaningful
conclusions from a chart containing gross fuel sales revenue, C-store revenue, and total
sales revenue. (Doc. 186-1 at 14.) Umbeck presents a chart with these figures and blankly
states “the table shows no significant decline in revenues from fuel sales or store sales.”
(Doc. 186-1 at 15.) Yet there is zero explanation or analysis to show why differences the
chart shows in revenue should be considered insignificant. Umbeck thus provides no
reliable reasoning supporting his conclusion that no significant loss of revenues occurred
over the relevant time period. Valencia-Lopez, 971 F.3d at 898. In sum, Umbeck
inadequately described his methodology, failed to show how his methodology is
supported in his field and reliable, did not establish the meaning of a “significant” loss or
financial harm, did not explain why his fifteen-minute Verifone threshold is appropriate,
and did not tie any of his (questionably-selected) computer issues to any finances
whatsoever.
For these reasons, Umbeck’s Opinions 3 and 4 are excluded.
Opinion 5 Regarding Customer Reviews
Umbeck obtained 36 customer reviews through Google Maps from the relevant
period and concludes there is no evidence of customers being upset about the computer
problems, and thus “no evidence of a significant loss of business . . . due to the alleged
computer problems.” (Doc. 186-1 at 21–22.) Umbeck’s discussion of the customer
reviews is unusually scant and confusing. He says that clicking on the station on Google
Maps “open[s] up a website with all kinds of information about the station, including the
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 7 of 16

- 8 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
experiences of customers who like to leave comments and reviews about the visit.” (Doc.
186-1 at 21–22.) It is unclear whether this “website” is Google Maps or another platform.
Rather than select comments exclusively from the relevant period, Umbeck includes
reviews from 2021 to 2023 to “see the comments.” (Doc. 186-1 at 22.) He offers no real
explanation why he chose a broader period. He requests the court read through the
reviews in the appendix of his report to see “very positive” and “not positive”
descriptions of things. (Doc. 186-1 at 22.) He notes that in the 36 reviews he obtained,
there was not one comment mentioning computer problems or clerks being on the phone
to report computer issues. (Doc. 186-1 at 22.) From these facts alone, Umbeck concludes
the customer complaints provide “no evidence of a significant loss of business at
[Chandler Gas] due to the alleged computer problems.” (Doc. 186-1 at 22.)
This conclusion by Umbeck does not meet the Daubert standard. Even assuming
the accuracy of the customer reviews themselves, Umbeck provides no reliable method
for extrapolating economic harm from qualitative anecdotal feedback. His methodology
appears to have consisted of reading through a relatively arbitrary collection of consumer
reviews of Chandler Gas, and nothing more. There is no part of Umbeck’s background
that qualifies him to conduct a qualitative analysis of customer reviews retrieved through
his own unexplained research on Google Maps. See Hankey, 203 F.3d 1160, 1168–69
(9th Cir. 2000); see also 11333 Inc., 261 F. Supp. 3d at 1027. Even if his background
demonstrated expertise to conduct such a qualitative analysis, Umbeck does nothing to tie
these consumer reviews to any impacts on the business of Chandler Gas. Umbeck also
fails to consider other resources that could provide a fuller picture of customer sentiment
(Doc. 186 at 14) and ultimately provides no reason why his methodology is sound or
proper.
For these reasons, Opinion 5 is excluded.
Opinion 6
Opinion 6 relies entirely on excluded Opinions 3 through 5, and therefore depends
on unreliable and inadmissible testimony. Although inadmissible evidence may be
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 8 of 16

- 9 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
considered in formulating expert opinions, Fed. R. Evid. 703, Umbeck may not rely on
evidence that itself is unreliable. See Daubert, 509 U.S. at 589; see also Gen. Elec. Co. v.
Joiner, 522 U.S. 136, 146 (1997). Here, Umbeck’s conclusion depends substantially on
Opinions 3-5, which have been excluded as methodologically unreliable. Because the
foundation for Opinion 6 is unreliable and that opinion is otherwise broad and
unsupported by independent valuation methodology, it is excluded.
Opinion 7 Regarding the Causation of Lost Profits
Umbeck’s Opinion 7 concludes that any decrease in fuel sales volume during the
relevant period was caused by Chandler Gas’s pricing decisions and not the alleged
operating system failures. (Doc. 186-1 at 35.) Chandler Gas argues this opinion—which
is based primarily on price differentials between Chandler Gas and the nearby Circle K
station—should be excluded because it is “flawed and unreliable” and prejudicial. (Doc.
186 at 19.)
To provide support for Opinion 7, Umbeck uses data on the station’s average
monthly retail prices before, during, and after Chandler Gas’s ownership. (Doc. 186-1 at
23.) Umbeck first compares Chandler Gas’s prices with those of its eight closest
competitors, which seems to show nearly identical pricing between 2018 and 2024. (Doc.
186-1 at 23.) But then Umbeck provides stronger support for his conclusions. He
demonstrates a gradual decline in monthly average gasoline sales for Chandler Gas (Doc.
186-1 at 25) and a gradual increase in the differential between the retail price offered by
Chandler Gas and the wholesale price at which it purchased the gasoline (Doc. 186-1 at
28). Finally, Umbeck compares the monthly price of Chandler Gas with a competitor
Circle K station just under one mile away. (Doc. 186-1 at 30.) Umbeck’s data shows that
Chandler Gas’s average monthly retail price was often a few cents below Circle K’s price
for the last half of 2021, but several cents higher than Circle K’s in 2022 (and even up to
more than fifteen cents higher in November 2022). (Doc. 186-1 at 30.) In the same chart,
Umbeck also shows a mostly-gradual decline in the average monthly volume of gasoline
sold by Chandler Gas. (Doc. 186-1 at 30.)
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 9 of 16

- 10 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
From this data, Umbeck concludes the retail prices set by Chandler Gas—and not
the computer problems—caused the volume of gasoline sales to drop. (See Doc. 186-1 at
31, 35.) This testimony is relevant to causation and damages because it offers an
alternative explanation for the decline in sales volume, which is a key contested issue in
the case. Expert testimony that helps the jury evaluate competing causal explanations for
damages claims is within the scope of Rule 702. See Hangarter, 373 F.3d at 1016. The
methodology employed by Umbeck is also sufficiently reliable. Economic experts like
Umbeck may rely on historical price data and market comparisons to form opinions about
the effect of pricing on sales. Here, Umbeck presents data showing evidence of patterns
between price changes and volume shifts. Since the analysis is informed by Umbeck’s
background as an economist and relevant experience within the petroleum industry, it
sufficiently satisfies the Daubert standard. Primiano, 598 F.3d at 564. Though Umbeck’s
causal conclusion regarding lost fuel sales is sweeping, the court does not find the
analytical gap between the data and opinion proffered “too great.” See Gen. Elec., 522
U.S. at 146. Any weaknesses in the scope of the comparative analysis or the inference
drawn by Umbeck in Opinion 7 may be addressed through cross-examination.
Accordingly, the motion to exclude Opinion 7 is denied.
Opinion 8 Regarding Plaintiffs Having Caused All Loss in Value
Umbeck’s Opinion 8 states that “any loss in value the business might have
incurred during this time period was caused by the plaintiffs.” (Doc. 186-1 at 9.) Unlike
Umbeck’s pricing analysis in Opinion 7, Umbeck does not identify a valuation
methodology or provide an evidentiary basis for this opinion. Umbeck does not perform a
discounted cash flow analysis, comparable sales analysis, or any other recognized
valuation technique. Nor does he provide an economic model linking the alleged causes
(e.g., pricing decisions) to any measurable diminution in business value. In fact,
Umbeck’s report includes essentially no discussion or reasoning to support this opinion:
there is not a single sentence about the business value or how Chandler Gas may have
caused any loss in value. This opinion is too unreliable to satisfy the necessary standard
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 10 of 16

- 11 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
because it does not have an adequate analytical or methodological basis. See Gen. Elec.,
522 U.S. at 146 (holding courts may exclude expert testimony supported only by ipse
dixit).
Accordingly, Opinion 8 is excluded.
Rebuttal Report
Chandler Gas also objects to portions of Umbeck’s rebuttal report, arguing
Umbeck impermissibly exceeds the scope of proper rebuttal. (Doc. 186 at 20–21.)
Rebuttal testimony must be “intended solely to contradict or rebut evidence on the same
subject matter identified by another party’s expert.” Fed. R. Civ. P. 26(a)(2)(D)(ii); see
also Daly v. Fesco Agencies NA Inc., 108 F. App’x 476, 480 (9th Cir. 2004). Expert
rebuttal may respond to, analyze, or critique the opinions of an opposing expert, but it
may not be used to advance new arguments, theories, or analyses that should have been
disclosed in the rebutting expert’s original report. See Baker v. SeaWorld Ent., Inc., 423
F. Supp. 3d 878, 896 (S.D. Cal. 2019) (“[r]ebuttal testimony cannot be used to advance
new arguments or new evidence”) (internal quotation marks omitted). Accordingly,
Umbeck will be permitted to offer rebuttal testimony only to the extent it directly
responds to or contradicts McDevitt’s opinions. See Puente v. City of Phoenix, No. CV-
18-02778-PHX-JJT, 2021 WL 1209302, at *2 (D. Ariz. Mar. 31, 2021) (applying Fed. R.
Civ. P. 26(a)(2)(D)(ii)). Any testimony beyond the proper scope of rebuttal will be
excluded.
c. Conclusion
Umbeck may offer Opinions 1, 2, and 7. Opinions 3, 4, 5, 6, and 8 are excluded.
To be clear, Umbeck cannot offer testimony regarding the technical functioning of the
operating system, the Verifone records, or the actual cause of any system outages.
Additionally, Umbeck must not offer opinions based on personal feelings or unexplained
assumptions rather than reliable principles and methods. (See, e.g., Doc. 186-1 at 16
(“Having experienced numerous computer problems myself, I’m sure these problems
were very annoying for the individuals operating the station. However, if it can be
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 11 of 16

- 12 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
resolved by making a 5-minute phone call, it will probably not cause your customers to
leave your station and go somewhere else for their fuel and store items.”).)
III. Marathon’s Motion to Exclude McDevitt
Unlike Umbeck’s opinions, McDevitt’s opinions will not be addressed
individually. McDevitt’s six opinions are not independent conclusions on distinct topics.
Rather, they are different numerical outputs of an economic damages model estimating
lost profits and business value over a defined period. His methodology, assumptions, and
input materials are common to all six opinions. To avoid redundancy, McDevitt’s
opinions are analyzed at once, with a focus on whether his qualifications, methodology,
and underlying assumptions satisfy the necessary Daubert standard.
a. McDevitt’s Opinions
Max McDevitt is an economist at the consulting firm, The Fontana Group, Inc.,
and has “assisted with” over two dozen cases related to franchisee issues, generally in the
automotive industry. (Doc. 192-1 at 5.) Chandler Gas hired Fontana and McDevitt to
provide relevant economic analysis for this case. (Doc. 192-1 at 6.) Specifically,
McDevitt has been retained to produce an expert report estimating the lost profits for
Chandler Gas between June 2021 and July 2024 and the loss of value on the sale of
business assets for Chandler Gas due to the alleged point-of-sale operating system
malfunctions. (Doc. 192-1 at 6–7.) McDevitt intends to introduce the following opinions
at trial:
1. Chandler Gas lost an estimated 907,708 gallons of fuel sales between June 2021
and July 2024
2. Chandler Gas lost an estimated $1,731,972 in C-Store sales between June 2021
and July 2024
3. Chandler Gas lost an estimated $333,040 in fuel profits between June 2021 and
July 2024
4. Chandler Gas lost an estimated $388,532 in C-Store profits between June 2021
and July 2024
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 12 of 16

- 13 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
5. Chandler Gas lost an estimated $721,572 in total profits (combined fuel and C-
Store) between June 2021 and July 2024
6. Chandler Gas’s estimated loss of value on the sale of business assets was $784,604
(Doc. 192-1 at 7.)
b. Analysis
McDevitt is an economist with a doctorate in economics from Boston University.
(Doc. 192-1 at 5.) He has experience with applied economics and statistics, especially
within the retail automotive industry. (Doc. 192-1 at 20–22.) He consults and performs
analyses on topics like applied econometrics, economic harm, franchise economics, and
spatial sales distribution and market behavior. (Doc. 192-1 at 20–21.) As part of his work
with Fontana, McDevitt has worked on cases regarding lost profits and lost sales, among
other related economic topics. (Doc. 192-1 at 5.) Marathon challenges McDevitt’s
qualifications on the basis he lacks specialized experience in retail gasoline markets and
the petroleum industry. (Doc. 192 at 1.)
McDevitt’s educational background and professional experiences provide the
minimal foundation required under Rule 702 for testimony regarding basic economic-
damages calculations. See Hangarter, 373 F.3d at 1015–16. There is generally no
requirement for an expert to be a specialist in a given field. Doe v. Cutter Biological, Inc.,
a Div. of Miles Lab’ys, Inc., 971 F.2d 375, 385 (9th Cir. 1992). An expert is qualified to
offer opinions so long as he does not go beyond his knowledge and experience. See
Gorney v. Safeway Inc., No. CV-23-01413-PHX-SHD, 2025 WL 2586133, at *5 (D.
Ariz. Sept. 8, 2025). Here, McDevitt is not going beyond his specialized field of applied
economics. Though he does not appear to have extensive experience in the petroleum
industry, he does have the necessary background to conduct damages modeling and offer
opinions on lost profits, sales, and value. (See Doc. 192-1 at 20–21.) Any lack of
specialized industry experience for McDevitt would merely go to the weight—not
admissibility—of his testimony. See Hangarter, 373 F.3d at 1015–16; see also United
States v. Garcia, 7 F.3d 885, 890 (9th Cir. 1993). Therefore, Marathon’s arguments
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 13 of 16

- 14 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
surrounding McDevitt’s qualifications fail.
Marathon also takes issue with McDevitt’s methodology. Marathon argues
McDevitt’s damages opinions rest on biased assumptions—particularly that all lost sales
were attributable to operating system glitches rather than price increases or competition.
(Doc. 192 at 10.) But McDevitt’s assumptions, which he makes very clear, do not stray
into terrain that would preclude his testimony. He reviewed historical data, incorporated
alternative pricing scenarios, and grounded his damage calculations in the station’s actual
financial records. Nuveen Quality Income Municipal Fund, Inc. v. Prudential Equity
Group, LLC, 262 F. App’x 822, 824 (9th Cir. 2008) (“[a]n expert opinion is properly
excluded where it relies on an assumption that is unsupported by evidence in the record
and is not sufficiently founded on facts”); cf. Guidroz-Brault v. Missouri Pac. R. Co., 254
F.3d 825, 830 (9th Cir. 2001) (excluding expert opinion based on insufficiently-supported
assumption). And experts are allowed to rely on records created by others if they disclose
their assumptions and use those records to apply their own specialized expertise. See Fed.
R. Evid. 703; see also Hyer v. City & Cnty. of Honolulu, 118 F.4th 1044, 1056 (9th Cir.
2024). Ultimately, if an assumption has a reasonable basis in the record, an economics
expert like McDevitt may stretch the assumption to extremes so long as he does not veer
into “unreliable nonsense.” See Unknown Party v. Arizona Bd. of Regents, 641 F. Supp.
3d 702, 727 (D. Ariz. 2022); see also Alaska Rent-A-Car, 738 F.3d at 969–70 (holding
that expert’s reliance on assumptions affects weight, not admissibility, where
methodology is otherwise sound). Since the record indicates at least some basis for
McDevitt’s assumptions that the operating system malfunctions resulted in declined sales
and values, his testimony may be offered. Disagreements with McDevitt’s assumptions
and opinions are best left for cross-examination. Marsteller v. MD Helicopter Inc., No.
CV-14-01788-PHX-DLR, 2018 WL 3023284, at *2 (D. Ariz. May 21, 2018).
Marathon further asserts McDevitt ignored basic principles of economics like the
law of demand. (Doc. 192 at 11.) In making this argument, Marathon relies on cases
featuring experts whose analyses rested on assumptions contrary to basic economic
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 14 of 16

- 15 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
principles. See, e.g., Crystal Semiconductor Corp. v. TriTech Microelectronics Int’l, Inc.,
246 F.3d 1336, 1359 (Fed. Cir. 2001) (court stating it would have excluded minimally-
qualified expert who failed to account for price elasticity of demand). But that argument
essentially restates Marathon’s complaint that McDevitt failed to conduct a wholistic
causation analysis incorporating the price of fuel. That McDevitt did not conduct an
independent causation analysis is no basis for exclusion. A damages expert may assume
liability and opine solely on the amount of damages. See Calyxt Inc. v. Tri-Rotor LLC,
No. CV-20-01221-PHX-DLR, 2024 WL 2699938, at *4 (D. Ariz. May 24, 2024)
(permitting expert to assume causation when providing approximate estimation of
damages). An expert opinion must rest on more than speculation but need not eliminate
all competing explanations, see Stephens v. Union Pacific Railroad Co., 935 F.3d 852,
856 (9th Cir. 2019), and the reasonableness of the assumptions is a matter for the
factfinder. Though Marathon may contend McDevitt’s analyses were flawed because
Chandler Gas raised its prices above competitors, this argument does not render
McDevitt’s testimony inadmissible. He did not rely on unsupported speculation and the
fact that he did not conduct independent causation analysis is no issue.
Lastly, Marathon argues McDevitt’s opinions should be excluded because the
opinions would mislead the jury and cause unfair prejudice. (Doc. 192 at 8.) Under Rule
403, otherwise admissible expert testimony should be excluded if the probative value of
the evidence is substantially outweighed by “the danger of unfair prejudice, confusion of
the issues, or misleading the jury, or by considerations of undue delay, waste of time, or
needless presentation of cumulative evidence.” Fed. R. Evid. 403. This is an
extraordinary remedy in the context of otherwise-admissible expert testimony and would
be inappropriate here. McDevitt’s calculation of damages has probative value given the
issues at hand, and any risk of prejudice or confusion can be mitigated through cross-
examination, the presentation of Umbeck’s competing analysis, and appropriate jury
instructions. See United States v. Pritchard, 993 F. Supp. 2d 1203, 1213 (C.D. Cal.
2014), aff’d, 692 F. App’x 349 (9th Cir. 2017). The probative value of McDevitt’s
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 15 of 16

- 16 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
testimony is not substantially outweighed by the danger of unfair prejudice, so the motion
to exclude under Rule 403 is denied.
c. Conclusion
In all, McDevitt’s economic damages opinions are supported by relevant expertise,
employ a methodology that is sufficiently reliable under Rule 702, and rest on an
adequate factual basis. The issues Marathon raises—the validity of McDevitt’s
assumptions and scope of his analysis—are properly addressed through cross-
examination and competing expert testimony, not through Daubert exclusion.
Accordingly, Marathon’s motion to exclude the testimony of McDevitt is denied.
Accordingly,
IT IS ORDERED the Motion to Exclude the Testimony of Umbeck (Doc. 186) is
GRANTED IN PART and DENIED IN PART. The motion to exclude Umbeck’s
Opinions 3, 4, 5, 6, and 8 is GRANTED. The motion to exclude Umbeck’s Opinions 1,
2, and 7 is DENIED.
IT IS FURTHER ORDERED the Motion to Exclude the Testimony of McDevitt
(Doc. 192) is DENIED.
Dated this 29th day of October, 2025.
Case 2:23-cv-00400-KML Document 222 Filed 10/29/25 Page 16 of 16