Plaintiff John Doe, who was referred to by a pseudonym by the Court, brought an action against the Trustees of Dartmouth College (“Dartmouth”) alleging that Dartmouth had violated Title IX of the Education Amendments of 1972 and had breached a contract by expelling him from Dartmouth’s Geisel School of Medicine. This expulsion followed Dartmouth’s determination that he had sexually assaulted another medical student. Doe had been a fourth-year medical student at Geisel, and Dartmouth had subjected him to an internal disciplinary proceeding in response to allegations made by his former roommate, Sam Smith. Smith had alleged that Doe had performed oral sex on him without his consent. Following this proceeding, Dartmouth concluded that Doe had indeed sexually assaulted Smith, leading to Doe’s expulsion from Geisel. Subsequently, Doe initiated this legal action seeking injunctive and monetary relief. He contended that Dartmouth’s disciplinary procedure had failed to adhere to the requirements of Title IX, as well as Dartmouth’s own policies, constituting a breach of contract.
The Court had considered Dartmouth’s motion to exclude Doe’s expert, Cyndi J. Livermore, on matters related to lost wages and lost earning capacity, as per Federal Rule of Evidence 702, Daubert v. Merrell Dow Pharmaceuticals, Inc, and its progeny.
Livermore’s report had analyzed the lost wages and lost earning capacity incurred by Doe due to his expulsion, considering two potential career paths: internal medicine and cardiology. Her ultimate determination was that Doe had already suffered damages amounting to at least $429,000 (in the case of pursuing internal medicine) and up to $784,000 (if he had pursued cardiology). She also concluded that Doe’s future lost earnings would have ranged from $1.52 million (as a practitioner of internal medicine) to $3.97 million (as a cardiologist). In arriving at these figures, Livermore had considered several factors, including: (1) an estimation of Doe’s remaining work life; (2) Doe’s anticipated life expectancy; (3) the probability of employment in each career path; and (4) Doe’s projected earnings for each career path had he not been expelled. To determine his projected earnings but-for his expulsion, Livermore had factored in: (a) Doe’s earnings prior to his expulsion from Dartmouth; (b) the probability, expectancy, and reasonability of future earnings; and (c) future growth. Additionally, Livermore had taken into account Doe’s post-expulsion income and projections of actual or mitigated earnings.
Business Valuation Expert Witness
Cyndi Livermore is a Vice President at Management Planning Inc. She has performed hundreds of business valuations ranging from pre-revenue start-up to $1B revenue pre-IPO companies, and across many industries, including: Agribusiness, Automotive, Banking, Construction, Family Offices, Precision Machinery, Real Estate Holding. Cyndi J. Livermore successfully earned her Bachelor of Science degree in Business Administration from DeVry University, followed by the attainment of her Master of Business Administration (M.B.A.) from the Southern Methodist University – Cox School of Business. Livermore was the director of ComStock Advisors, a provider of professional services in the area of business valuation, litigation support services, and management consulting prior to joining Management Planning Inc.
Discussions by the Court
Dartmouth had initially argued that Livermore lacked the necessary expertise to testify as an expert regarding Doe’s lost wages and lost earning capacity. Dartmouth contended that her specialization in business valuation rendered her unqualified to provide opinions on these matters, especially in the context of a medical student’s interrupted education. Additionally, Dartmouth emphasized that Livermore had never testified as an expert in cases involving medical students or doctors’ lost wages or earning capacity. However, the Court found Dartmouth’s argument unconvincing. Livermore, an economist with more than a decade of experience in financial analysis, held both a bachelor’s and a master’s degree in business administration. At the time of preparing her report, she served as the director of ComStock Advisors, a firm specializing in business valuation, litigation support, and management consulting. While Livermore acknowledged her primary focus on business valuation, she testified that she possessed substantial experience in conducting financial valuations of primary care physicians and cardiologists. Furthermore, she had previous experience in performing lost wages and lost earning capacity analyses. The fact that Livermore had not previously undertaken such an analysis for someone in Doe’s precise situation did not render her unqualified considering an expert need not be a preeminent practitioner in the relevant field to possess sufficient knowledge.
Dartmouth had contended that Livermore’s expert opinion regarding Doe’s lost future earnings wouldn’t be beneficial to the jury in determining a fact in issue, as Doe was seeking equitable relief in the form of reinstatement at Geisel, making Livermore’s opinion on lost earning capacity immaterial. Dartmouth argued that if Doe succeeded at trial, he would return to Geisel and regain his ability to earn a doctor’s income, and if he failed, he would have no basis for recovering damages related to lost earning capacity. However, the Court disagreed with Dartmouth’s argument. Doe had brought claims against Dartmouth based on contract and Title IX, seeking both injunctive relief in the form of reinstatement and monetary damages. Typically, Courts do not order equitable relief in Title IX or contract-related cases when monetary damages would suffice to compensate the Plaintiff. As highlighted in Doe’s objection, the Court had the discretion to decide not to grant the injunctive relief sought even if he prevailed on one or more of his claims. Consequently, evidence concerning Doe’s lost earning capacity would indeed assist the jury in comprehending the evidence and determining a relevant fact in the case.
Dartmouth had argued that Livermore’s expert opinion lacked a reliable methodology because, during her deposition, she had acknowledged that a comprehensive damages analysis should include a “skills analysis” (examining the range of jobs suited to an individual’s transferable skills and talents) as well as a “labor market analysis” (evaluating the available job opportunities and earning potential for individuals with Doe’s skills). Additionally, Dartmouth raised concerns about Livermore’s failure to consider the potential for bonuses, stock options, or promotions in Doe’s current job.
Upon reviewing Livermore’s report, the Court concluded that her methodology was indeed reliable in forming her conclusions. In her assessment of Doe’s lost wages and earning capacity, Livermore began by considering factors such as Doe’s remaining life expectancy and the portion of that life expectancy during which he would be expected to work. She also factored in Doe’s probability of employment, which encompassed his present employment, the likelihood of him completing his medical degree if his expulsion were reversed, the chances of degree completion if his expulsion were not reversed, and the probability of Doe securing a residency if he completed his degree. Moreover, Livermore took into account projections of Doe’s future earnings in specific medical professions based on published data. She further applied a discount to calculate the present value of future earnings and estimated annual inflation-based raises.
The Court agreed with Doe, emphasizing that Dartmouth’s objections pertained more to the factual inputs used in Livermore’s analysis rather than the reliability of her methodology. Dartmouth’s contentions, particularly those related to alternative job opportunities for Doe and the potential for promotions, stock options, or bonuses in his current position, were deemed suitable for cross-examination rather than grounds for excluding Livermore’s testimony.
Dartmouth had argued that Livermore’s opinions regarding Doe’s lost wages and lost earning capacity as a cardiologist were not aligned with the facts of the case and should not be presented to the jury. The Court concurred with Dartmouth on this matter. Doe’s complaint explicitly indicated his intention to pursue a career as a primary care physician, with no mention of considering a career in cardiology. Additionally, during his deposition, Doe confirmed his plan to become a primary care physician upon completing his medical degree.
Under New Hampshire law, which applied to Doe’s breach of contract claims, damages cannot be awarded for “speculative losses”, as was held in Miami Subs Corp. v. Murray Family Trust & Kenneth Dash Partnership. The remedies available in private Title IX actions paralleled those found in traditional contract claims. Rather than compensating for speculative losses, contract damages were designed to restore the prevailing party to the position they would have been in had the contract been performed. In this case, Doe’s expressed intent was to pursue a career as a primary care physician if allowed to complete his medical degree. Consequently, Livermore’s opinions concerning Doe’s lost wages and earning capacity as a cardiologist were deemed irrelevant, not assisting the jury in determining a fact in issue, and not grounded in the factual circumstances of the case.
Held
Dartmouth’s motion to exclude Cyndi Livermore’s testimony was granted in part and denied in part. Specifically, it was granted to the extent that it sought to exclude testimony related to Doe’s lost wages and lost earning capacity as a cardiologist. However, the motion was otherwise denied.
The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.
Key Takeaways
This case demonstrates how Courts serve as gatekeepers regarding expert witness testimony under Daubert and Rule 702. When expert testimony is challenged, the Court must assess the witness’s qualifications, the relevance of their testimony, and the reliability of their methodology. Here, the Court found the Plaintiff’s expert was qualified to testify about lost earnings despite lacking direct experience with similar cases on account of her significant experience conducting financial valuations in the exact same industry.
However, the Court agreed part of the expert’s testimony regarding speculative lost earnings as a cardiologist was irrelevant. This demonstrates that experts cannot testify about damages that are too speculative based on the facts of the case. Experts must tailor their testimony to the circumstances at hand. The Court also assessed the reliability of the expert’s methodology under Daubert’s flexible test. The Court found her methodology reliable amidst objections about the factual inputs she used. This shows that mere disagreement about an expert’s assumptions is fodder for cross-examination rather than exclusion.
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