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United States District Court, S.D. New York

February 2, 2004.

WANTANABE REALTY CORP., et al., Plaintiffs, -against- THE CITY OF NEW YORK, et al., Defendants

The opinion of the court was delivered by: LEWIS KAPLAN, District Judge


In November 2000, the City of New York demolished the Thunderbolt, a roller coaster at Coney Island that had not been used since 1982 or 1983, allegedly on the ground that the structure had become hazardous. Plaintiff, the owner, brought this action for damages, claiming that Page 2 the demolition was unjustified. The trial was bifurcated. The first jury found the City liable for common law trespass. The second jury rendered a special verdict that, in substance, found no damages, so plaintiff recovered nominal damages alone.

Shortly before the damages trial, the Court granted defendants' motion in limine to exclude the testimony of one of plaintiffs proposed expert witnesses, Richard Battaglia, and indicated that an opinion would follow in the event the matter was not resolved in a manner that obviated any need for it. As no such resolution has been reached, this opinion follows.*fn1 The Court assumes familiarity with its previous opinions.*fn2

 The Proposed Testimony

  Plaintiff proposed to call Mr. Battaglia to testify that replicating the Thunderbolt anew would cost $15.8 million,*fn3 that it had an historic value of $4 to $5 million,*fn4 and that the value of the Thunderbolt just prior to its destruction was $10.7 million, of which he attributed $5 million to Page 3 "historic value."*fn5 According to Mr. Battaglia's report, the $15.8 million replication cost*fn6 included, among other things, $8.1 million for a ride system, which was simply a price quote obtained from a Swiss manufacturer, plus $700,000 for shipping the ride from Switzerland and $1.4 million for installing it in Coney Island, and an additional $928,800 to rebuild the so-called Kensington Hotel.


  The threshold question tendered by defendants was whether Mr. Battaglia was qualified to offer opinions as to the replication cost of the Thunderbolt, its pre-demolition value, and its "historic value."

  Mr. Battaglia has a B.S. in business with a marketing emphasis. For a number of years, he worked for The Disney Company, first as a ride operator and then in supervisory capacities and in the marketing department at Disneyland.*fn7 Later, he joined a three-person project development team that assessed the relative success of different rides at Disneyland in preparation for the development of Disney World in Florida.*fn8 After leaving Disney, Mr. Battaglia joined Ringling Bros. Barnum & Bailey Circus as a vice president of planning where he did similar work.*fn9 Page 4

  Eventually, Mr. Battaglia and another started the firm with which he now is associated, Battaglia Incorporated,*fn10 which develops theme parks and entertainment complexes and resorts for clients on a turnkey basis, developing a concept, participating in design, doing feasibility analyses and preparing architectural and engineering drawings.*fn11 While it does not actually build, it sometimes oversees general contractors on behalf of owners.*fn12 It is involved also in developing revenue estimates in order to evaluate proposed capital investments and in making initial estimates of the costs of constructing proposed amusement rides.*fn13

  It is far from clear that Mr. Battaglia's background, even given the liberality of the standards for qualification, qualified him to testify concerning these matters. It was unnecessary to make such a determination, however, in light of the discussion that follows.

 Replication Cost

  The measure of damages in this case was the lesser of the value of the structure, in its then depreciated condition, immediately prior to demolition, and the amount, if any, by which the demolition reduced the fair market value of the real estate.*fn14 Plaintiff contended that the difference Page 5 between building a new replica of the Thunderbolt and the cost to repair the deteriorated structure was a fair estimate of the roller coaster's depreciated value prior to demolition.*fn15 Testimony regarding the replication cost of the Thunderbolt therefore was relevant, contrary to defendants' contention. There remains, however, defendants' assertion that Mr. Battaglia's opinion as to replication cost was insufficiently reliable and grounded.

  In assessing reliability under Rule 702, Daubert v. Merrell Dow Pharmaceutical,*fn16 and its progeny, a district court should consider indicia of reliability, including, but not limited to, (1) whether the testimony is grounded on sufficient facts, (2) whether the underlying methodology is reliable, and (3) whether the witness has applied the method reliably to the facts.*fn17 Admissibility, when challenged, must be established by the proponent by a preponderance of the evidence.*fn18 "The burden of demonstrating that the testimony is competent, relevant, and reliable rests with the proponent of the testimony."*fn19

  The principal figure in Mr. Battaglia's replication cost estimate was the $10.2 million Page 6 quote for the ride system ($8.1 million), the cost of shipping it from Switzerland ($700,000) and the installation cost ($1.4 million).*fn20 It is clear from his report that the $8.1 million bid was that of Intamin,*fn21 a Swiss roller coaster manufacturer and the only supplier from whom Mr. Battaglia sought a quotation.*fn22 To be sure, Mr. Battaglia asserted that his firm "actually did a cost estimate in-house to determine what we felt it was going to cost to fabricate the roller coaster" and that Intamin's bid "corroborated" that estimate.*fn23 But he never offered his firm's in-house estimate, and he certainly never demonstrated the basis for it. In consequence, even if the Court had accepted the assertion that Mr. Battaglia's firm did develop its own estimate, a matter as to which it has reservations, there would have been no basis upon which it reasonably could have concluded that it was reliable and soundly based.

  To the extent that the $10.2 million estimate was simply a relation of Intamin's bid, it was not Mr. Battaglia's opinion at all and may not be received as expert testimony. The Court is mindful that Rule 703 allows an expert to rely upon information supplied by another in forming an opinion where the material relied upon is of a type reasonably relied upon by experts in the field.*fn24 Page 7 But this was not such a situation. Mr. Battaglia was not proposing to offer an opinion based on the Intamin estimate.*fn25 He was proposing to offer the Intamin estimate itself, which of course was hearsay, as it was Mr. Battaglia's account of Intamin's out of court statement that it would have built, shipped and installed the ride system for the quoted price and it was offered for the truth of the matters asserted. But an expert may not act as a "mere conduit" for the hearsay of another.*fn26 Nor did the Intamin estimate come under an exception to the hearsay rule. Rule 803(17), the exception for market reports and commercial publications, was not applicable, as it covers only those market quotations prepared for general use by an industry or the general public.*fn27 Unpublished price quotations or estimates done for litigation, as was this one, do not contain similar guarantees of reliability. The exception under Rule 807 is equally unavailable, as there is nothing particularly trustworthy about the Intamin estimate, and plaintiff in any case did not rely upon this rule.*fn28 Page 8

  The remainder of Mr. Battaglia's replication figure includes an estimate for cost of replicating the so-called Kensington Hotel and a number of other elements, such as signage and lighting. Mr. Battaglia's opinion as to a replication cost of $928,800 for the replacement of the Kensington Hotel clearly lacked any reliable basis. This was derived by applying a $135 per square foot construction cost figure for which no basis was given, to an unreliable 6,880 square foot estimate of the size of the building, all without any real knowledge of the characteristics of the structure. The other elements in Mr. Battaglia's replication cost estimate together account for something in the neighborhood of $4 to $6 million and may be dealt with summarily. The Court was not persuaded that there was a reliable and sound basis for any of it.*fn29

 Pre-demolition Value

  A. The Roller Coaster

  Mr. Battaglia assigned a $5.7 million value (exclusive of "historic value") to the roller coaster prior to demolition of which he attributed $660,000 to the hotel building. Put another way, he valued the roller coaster itself, including the ride system, the cars, and various other elements, at $5.1 million. In arriving at a figure for the value of the ride system, he started with the Intamin quotation of $8.1 million, estimated how much of that quotation represented the cost of the track, Page 9 estimated that 50 percent of the track of the roller coaster was reusable, and valued that at half of the Intamin quotation that he attributed to the track.*fn30 This portion of the proposed testimony was unreliable for the reasons described above, as it is based entirely on the inadmissable replication cost estimate.

  The second component of the $5.1 million pre-demolition value of the Thunderbolt encompassed the value of the queue structure, storage, locker room, signage, lighting and other elements.*fn31 Mr. Battaglia purportedly determined the value of these structures as they existed immediately prior to demolition by multiplying the dimensions of each unit, which were supplied by plaintiff, by a unit cost, to arrive at value per square foot.*fn32 Mr. Battaglia gave little explanation of how he determined the unit cost save to say that he took the unit cost to build each structure in today's market and decreased it to reflect what the structure would have been "worth" per square foot.*fn33 Nor did Mr. Battaglia explain how he reached a value of $150,000 for the two roller coaster trains, a third component of the pre-demolition value.*fn34 In reaching this estimate, he relied on a faint picture from a magazine article, and he had no knowledge of the size of the trains or whether they Page 10 had been covered.*fn35

  As the December 12, 2003 was a de bene esse deposition, it was Mr. Battaglia's trial testimony. In view of the fact that it was plaintiffs burden to develop a record demonstrating admissibility, and its failure to do so, the defendants' motion was granted with respect to Mr. Battaglia's opinion concerning the pre-demolition value of the roller coaster.

  2. Kensington Hotel

  Mr. Battaglia testified that the Kensington Hotel building was worth $660,000 before demolition. His first step in determining the value of the building was to accept as correct the owner's estimate of the square footage of the building (6,880 square feet) without even ascertaining whether the owner had measured it.*fn36 Then — without looking at architectural drawings*fn37 or knowing the condition of its structural members*fn38 or whether it had electricity or plumbing*fn39 — he multiplied the building area by an assumed $125 per square foot value and then subtracted $200,000 for fire damage.*fn40 Page 11

  There was nothing in the record to support a view that the $660,000 figure had any reliable basis, even assuming that Mr. Battaglia were qualified to offer an opinion on that point, which is highly debatable but need not be determined.

  3. Historic Value

  Mr. Battaglia opined that the Thunderbolt had a pre-demolition "historic value" of $5 million, above and beyond the $5.1 million value of the structure.*fn41 In reaching this figure, he asserted that he felt that the ridership of the roller coaster would be increased by "at least another hundred thousand . . . and at $50 per person we would generate $5 million, and so that would be the value. "*fn42 Presumably, this means that the Thunderbolt — as it stood prior to demolition and assuming that it were restored to operating condition — would have drawn 100,000 people more than would a replica or a newly built roller coaster. There were a great many problems with this proposed testimony.

  To begin with, Mr. Battaglia never articulated any reliable basis for this 100,000 estimate.*fn43 While he doubtless has experience in the theme park field, he has had no experience in Page 12 marketing historic roller coasters.*fn44 There is nothing in his background, at least so far as it was developed, to suggest that he has any reliable basis for coming to such a figure. And surely there is no evidence of any empirical market research such as consumer surveys, polling, focus groups or the like.

  Second, there is no basis for supposing that the $50 per person revenue figure Mr. Battaglia used would have been appropriate in this case. His testimony suggests that this was a per capita revenue figure derived from "a theme park setting,"*fn45 which is unlike that in which the Thunderbolt was situated. When pressed on this point, he conceded that a more appropriate revenue figure would have been $20 per capita, but then revised his incremental ridership estimate upward to 200,000 in light of the decreased cost.*fn46 But there was no basis for concluding that either the $20 per capita revenue figure or the revised incremental ridership estimate was reliable or predicated on any appropriate basis.

  Third, Mr. Battaglia's testimony provides no connection between either of the incremental revenue figures he gave and either net profit or value attributable to the historic nature of the roller coaster other than the ipse dixit that $4 million or $5 million in incremental revenue Page 13 equated to a $4 million to $5 million incremental value.*fn47

  Accordingly, the defendants' motion was granted as to Mr. Battaglia's proposed testimony regarding historic value.


  This Court is obliged to serve as a gatekeeper to ensure that expert testimony is competent, relevant, and reliable. Bearing in mind that qualified experts may reach different conclusions, each of which is sufficiently competent and reliable to place before the trier of fact, the proponent of Mr. Battaglia's testimony did not persuade the Court that Mr. Battaglia surmounted the relatively low hurdle required by Daubert and its progeny. Nor, in light of the fact that Mr. Battaglia's trial testimony already was before the Court in deposition form, could any of these difficulties have been cured. Accordingly, defendants' motion in limine, with respect to plaintiff's direct case was granted.*fn48


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