Fourth Circuit Narrows Expert-Confidentiality Disqualification and Defines the “Country Charge” Rule

Commentary on Brainchild Surgical Devices, LLC v. CPA Global Ltd., 90 F.4th 212 (4th Cir. 2025)

I. Introduction

The Fourth Circuit’s published decision in Brainchild Surgical Devices, LLC v. CPA Global Ltd. addresses two questions that frequently vex commercial litigants: (1) how to determine whether a contractually-defined fee is limited to pass-through costs, and (2) when a party’s former employee may testify as an expert against that party without running afoul of confidentiality concerns.

Brainchild, a Brooklyn-based medical-device company, hired CPA Global, a Jersey (Channel Islands) corporation, to manage worldwide patent renewals under a Renewal Services Agreement (“RSA”) and successive Renewal Notices (“RNs”). After three years Brainchild accused CPA of “fleecing” it by marking up two categories of fees—the “Country Charge” and the “Funds Management Adjustment” (FMA)—and sued for breach of contract, fraud, and related claims. The district court (E.D. Va.) dismissed the fraud claim, struck Brainchild’s experts, and granted summary judgment to CPA. On appeal the Fourth Circuit affirmed in part, reversed in part, and remanded.

II. Summary of the Judgment

Contract Interpretation. The court held that the RSA and RNs do not limit the Country Charge or the FMA to pure pass-through costs, but do require each Country Charge to “relate to infrastructure, personnel, and third-party expenses necessary to execute a renewal in the particular jurisdiction.” Brainchild’s “pass-through only” theory failed; however, its narrower “unrelated charge” theory survived summary judgment.
Implied Covenant of Good Faith. Because the express contract governed disclosures and fee structure, Brainchild’s good-faith claim could not create new obligations and was properly rejected.
Expert Testimony.
- David Cass—properly excluded for lack of relevant qualifications and for offering impermissible legal conclusions.
- John Keogh—district court erred in disqualifying him merely for historical exposure to CPA’s confidential business information, but was within its discretion to exclude opinions whose bases were not disclosed and that opined on contract meaning.
Fraud Pleadings. The Fourth Circuit affirmed dismissal with prejudice; Brainchild failed—after two attempts—to plead fraud with Rule 9(b) particularity.

III. Analysis

A. Precedents Cited and Their Influence

Ames v. American National Bank, 176 S.E. 204 (Va. 1934) – Canonical Virginia rule that “the pole star” of interpretation is the parties’ expressed words. Guided the court to privilege the text over equitable arguments.
Bridgestone/Firestone v. Prince William Square Assocs., 463 S.E.2d 661 (Va. 1995) – Once terms are clear, courts enforce the plain meaning; used to reject Brainchild’s pass-through gloss.
Barnett Bank v. Nelson, 517 U.S. 25 (1996) – Cited for “relates to” being a “highly general” connector word, undermining Brainchild’s restrictive reading.
Westberry v. Gislaved Gummi AB, 178 F.3d 257 (4th Cir. 1999) & Daubert, 509 U.S. 579 (1993) – Foundation for Rule 702 gatekeeping, justifying exclusion of unreliable experts.
Koch Refining Co. v. Jennifer L. Boudreau M/V, 85 F.3d 1178 (5th Cir. 1996) & Wang Labs. v. Toshiba, 762 F. Supp. 1246 (E.D. Va. 1991) – Two-part test for disqualifying “side-switching” experts; Fourth Circuit imported the test but limited it to litigation-related confidences.
Forrest Creek Assocs. v. McLean S&L, 831 F.2d 1238 (4th Cir. 1987); Marx & Co. v. Diners’ Club, 550 F.2d 505 (2d Cir. 1977) – Support for excluding expert opinions that construe contracts.

B. The Court’s Legal Reasoning

1. Contract Text Controls

The panel conducted a granular textual analysis. The RSA defined four separate charges. Only the “Official Charge” was expressly pegged to “the amount we pay”, signalling a strict pass-through. By contrast, the “Country Charge” must merely “relate to infrastructure, CPA Global personnel, and third parties … in a particular jurisdiction.” The inclusion of broader, non-cost words (“relate to”) and the omission of a “shall equal” clause suggested the parties accepted some markup.

Conversely, CPA’s own reading—that Country Charges could reflect worldwide overhead—ignored the narrowing phrase “in a particular jurisdiction.” Because Brainchild adduced evidence that at least some Country Charges did not correlate with jurisdiction-specific costs, a triable issue remained.

2. Sequencing versus Exhaustion

CPA argued that section 5.7, which required Brainchild to pay estimates before renewal, operated as an “exhaustion” bar: once Brainchild paid it could no longer contest. The court rejected that attempt to convert a billing sequence clause into a waiver of substantive breach claims and noted CPA failed to raise the defense below.

3. Implied Covenant Limited to Bad Faith in Exercising Existing Rights

Virginia law forbids using the covenant to rewrite unambiguous terms. Because the RSA expressly authorized aggregate estimates and did not mandate line-item detail, CPA’s non-disclosure could not constitute bad faith per se. Moreover, Brainchild offered no evidence of subjective dishonesty.

4. Expert Rulings

Cass – Lacked domain expertise and attempted to tell the jury what the contract meant; both reasons independently justified exclusion.
Keogh – The panel drew a key distinction: exposure to a company’s business secrets is not enough; disqualification requires confidences about the present litigation. Because CPA showed none, disqualification was error. Nonetheless, Keogh’s refusal to reveal the factual bases (RenewalsDesk data) triggered Rule 37(c) sanctions, and his contract interpretation was an impermissible legal opinion; exclusion on those specific grounds was proper.

C. Practical and Doctrinal Impact

1. “Country Charge” Rule for Service Agreements

The judgment establishes a blueprint for analyzing multi-component fee clauses: (1) isolate each fee’s operative verbs (“pay,” “relates to,” “comprising”), (2) look for explicit pass-through language, and (3) compare adjacent clauses to detect deliberate drafting contrasts. Any charge that “relates to” particular-jurisdiction costs must demonstrably tie back to that jurisdiction, even if not dollar-for-dollar.

2. Expert-Confidentiality Standard Narrowed

Prior district-court opinions occasionally treated any employee confidentiality as a bar to expert testimony. The Fourth Circuit now aligns with other circuits: only litigation-specific secrets (strategy, mental impressions, privileged documents) trigger inherent-power disqualification. Routine knowledge of pricing, operations, or historical data may still be used, subject to protective orders and Rule 26 disclosures.

3. Reinforcement of the “No Hidden Bases” Rule

Experts invoking proprietary or confidential data must either (a) disclose under an appropriate protective order or (b) forfeit the opinion. Courts will not permit “trust me” testimony or place the opposing party at an information disadvantage.

4. Class-Action Ramifications

Although class issues were not reached, the decision leaves intact a potentially nationwide class alleging improperly calculated Country Charges. Future plaintiffs must tailor their theory to unrelated, not pass-through, overcharges, and will need admissible expert analysis untainted by undisclosed confidential inputs.

IV. Complex Concepts Simplified

Pass-Through Cost – A fee identical to the amount a service provider actually pays a third party, with no markup.
“Relates to” (Contract Context) – Requires a logical connection, not identity. Example: a $50 Country Charge can exceed the exact $30 local-agent invoice but must still correlate with costs incurred in that jurisdiction.
Implied Covenant of Good Faith & Fair Dealing – A default rule that parties must exercise express contractual rights honestly and not subvert the agreement’s spirit. It cannot create new duties that contradict clear text.
Daubert / Rule 702 Gatekeeping – Judges screen expert evidence for relevance, reliability, and qualification before the jury sees it.
Disqualification vs. Exclusion – • Disqualification: bars a witness entirely (often for conflicts or confidentiality). • Exclusion: bars specific opinions or testimony under evidentiary rules but leaves the expert available on other topics.

V. Conclusion

Brainchild advances Fourth Circuit jurisprudence in two salient ways. First, it supplies a meticulous textual methodology for differentiating pass-through obligations from broader cost-related charges, likely to guide commercial contract disputes well beyond patent-renewal services. Second, it cabins the sometimes-expansive practice of expert disqualification to situations involving litigation-specific confidences, thereby safeguarding the truth-seeking function without sacrificing legitimate confidentiality interests. Practitioners should heed the decision’s twin lessons: draft fee clauses with precision, and ensure experts fully disclose the factual underpinnings of their opinions—confidential or not—under protective order if necessary.

Fourth Circuit Narrows Expert-Confidentiality Disqualification and Defines the “Country Charge” Rule: Commentary on Brainchild Surgical Devices, LLC v. CPA Global Ltd. (4th Cir. 2025)