This case features a collapsed Ponzi scheme, more than 200 investor-victims, and a federal equity Receiver. The Receiver sued Baker Donelson law firm and two of its former employees— individuals now with federal criminal convictions—for aiding and abetting, civil conspiracy, and other claims under Mississippi law. She seeks to hold them accountable for “the unsustainable liabilities inflicted by the Ponzi scheme” that harmed Madison Timber Properties’ “ability to repay [its] investors.”
The Receiver hired Marta-Ann Schnabel to provide expert opinion on law practice management. Baker Donelson moved to exclude Schnabel’s opinion.
Law And Legal Expert Witness
Marta-Ann Schnabel is the managing director of O’Bryon & Schnabel, PLC, a firm established 25 years ago at the turn of the millennium.
Over the last ten years, she has focused on defending professional (primarily legal) malpractice matters and assisting lawyers and judges with legal ethics issues. She is a 1978 graduate of Memorial University of Newfoundland, Canada, with a B.A. Honours in History. She received her Juris Doctorate from Loyola University College of Law in 1981, where she served as a member of Law Review and of the National Moot Court Team.
Schnabel served as President of the Louisiana State Bar Association and of the New Orleans Bar Association. She has been a member of the LSBA’s Rules of Professional Conduct Committee for 20 years, and she was a member of the LSBA’s Ethics Advisory Service Committee for 15 years.
Discussion by the Court
The Receiver hired Schnabel to offer expert opinion on law firm management. Schnabel provided the following opinions:
(1) Baker Donelson’s managerial and supervisory controls did not match the standards set by Baker Donelson’s Employee Handbook/Code of Business Conduct, By-laws, or good practice. The firm took no steps to enforce its own rules to supervise or limit the work of Jon Seawright and Brent Alexander.
(2) Rule of Professional Conduct 1.8 prohibits lawyers from entering into business transactions with clients, but Baker Donelson did not inquire about potential conflicts of interest based on the open and obvious way Seawright and Alexander conducted their timber business at the Baker Donelson Jackson office. Baker Donelson had a duty pursuant to Rules of Professional Conduct 5.1 and 5.3 to know about and supervise Alexander’s business activities, and there should have been concern that the relationship between Seawright and Alexander brushed up against Rule 5.4(b). Baker Donelson’s managerial and supervisory controls did not match the standards intended by the Rules of Professional Conduct.
(3) Baker Donelson should have known that Alexander and Seawright were operating this investment enterprise out of the Baker Donelson Jackson office. Baker Donelson did not take any adverse action, which demonstrates a lack of management and supervisory controls and falls below the standard of care required by Baker Donelson’s internal policies, the Rules of Professional Conduct, and the standard of care for law firms.
Analysis
Qualification
The firm argued that Schnabel is not an expert on Baker Donelson policy, that argument misapprehends her proffered area of expertise. She is offered as an expert in firm management. As part of developing her opinions, she reviewed Baker Donelson’s internal policies, to develop an opinion on firm management practices at Baker Donelson with respect to its internal procedures. Upon review, the Court is satisfied that Schnabel is qualified to offer expert opinion on law firm management.
Relevance
Baker Donelson challenged Schnabel’s proffered opinions of grounds of relevance and reliability. The Court first dispenses with the issue of relevance. Schnabel’s opinions are relevant to matters in this case.
Issues before the jury include whether Baker Donelson impliedly or otherwise authorized Seawright’s and Alexander’s timber business and whether, after the fact, Baker Donelson ratified that business by failing to take any adverse action. Whether, for instance, Baker Donelson followed its own internal procedures, including supervisory and disciplinary procedures, with respect to Alexander and Seawright could tend to show failure to supervise, authorization, and/or ratification of their actions. The Court found that these opinions satisfy the relevance requirement imposed by Daubert.
Reliability
As for reliability, Schnabel testified that the majority of her knowledge comes from a variety of professional experiences. She may draw on those experiences to inform the standard of care about which she intends to testify.
Baker Donelson also attacked Schnabel’s opinion as lacking a basis with respect to the firm’s failure to take action against Seawright and/or Alexander. There appears to be a basis for this opinion in, for example, admissions and interrogatory responses given by Seawright and Alexander. Likewise, Baker Donelson raised other attacks on Schnabel’s proffered opinions, but none rise to the level of defeating the presence of relevance or reliability. Testimony offered by Schnabel must still comport with the rules of evidence and may not veer outside the proper scope of expert testimony, but the Court is satisfied that her proffered opinions comply with the rules and guidelines set forth by the Supreme Court in Daubert such that exclusion is not required.
Held
The Court denied Baker Donelson’s motion to exclude the testimony of Marta-Ann Schnabel.
Key Takeaway
No one denies that an expert might draw a conclusion from a set of observations based on extensive and specialized experience. A witness’ experience, studies and education, combined with a review of the relevant materials can provide a reliable basis for expert testimony.
Please refer to the blog previously published about this case:
Law And Legal Expert Was Not Allowed to Opine on Notaries
Case Details:
| Case Caption: | Mills V. Baker |
| Docket Number: | 3:18cv866 |
| Court Name: | United States District Court for the Southern District of Mississippi, Northern Division |
| Order Date: | February 06, 2026 |
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