Plaintiffs Syntel Sterling Best Shores Mauritius Limited, and Syntel, Inc., (collectively, “Syntel”) initiated this action against The TriZetto Group, Inc. (“TriZetto”) and Cognizant Technology Solutions Corp. (“Cognizant,” and, collectively, “Defendants”), alleging breach of contract, intentional interference with contractual relations, and misappropriation of confidential information.
Syntel filed a motion to exclude the price erosion damages opinion of TriZetto’s expert, Thomas W. Britven.
Britven’s analysis proceeds in four steps: (1) estimating the average rates TriZetto would have charged absent Syntel’s challenged conduct, assuming annual increases in line with the Consumer Price Index based on Urban Consumers (“CPI”); (2) calculating the difference between projected revenue based on these rates and TriZetto’s actual revenue; (3) limiting the calculation to the six most impacted clients, and certain related clients, based on their share of revenue and (4) further narrowing the analysis work related to Facets, the product Syntel infringed, by applying the proportion of such work (70%) to TriZetto’s overall services.
Accounting Expert Witness
Thomas Britven has more than 30 years of experience as a financial damages consultant and trusted advisor specializing in intellectual property and complex commercial litigations. He has served as an expert in over 600 matters.
His long consulting career has allowed him to develop extensive expertise, including misappropriation of trade secrets, patent infringement, trademark, copyright, licensing disputes, complex financial damage analysis, breach of contract, business interruption, forensic accounting, and business valuation.
Britven is a Certified Licensing Professional, Certified Public Accountant, Certified Valuation Analyst, Chartered Global Management Accountant, and a Certified Fraud Examiner.
The Court held that Britven’s methodology for determining price erosion damages was not unreliable, finding that the analysis presented a reasonable approach to estimating the hypothetical pricing absent infringing competition. The Court noted that Britven applied a benchmark TriZetto itself used for pricing and confined the impact to relevant clients and services.
Syntel objected to Britven’s factual assumptions that (1) absent Syntel’s competition, TriZetto’s prices would have risen in tandem with the CPI and (2) 70% of TriZetto’s work is Facets-related. However, Britven based the assumptions on his interview of TriZetto’s Chief Executive Officer (“CEO”). TriZetto’s CEO stated, among other things, that (a) 70% of TriZetto’s total sales from TriZetto accounts [the parties dispute whether this is all accounts or only Facets accounts] comes from Facets services; (b) TriZetto increases its prices at the same rate as the CPI, but gave several major clients a three-year CPI holiday from annual price increases and (c) the rate reduction for major clients impacted the rest of the clientele. The Court held that the parties’ disagreement over factual assumptions “is precisely the role of cross-examination” not a basis for exclusion.
Price Elasticity
The Court added that Syntel’s additional criticism that Britven’s analysis failed to address price elasticity concerned the weight, not the admissibility, of the testimony.
Britven did address this issue by concluding, based on consumers’ past behavior, that the market was inelastic so long as TriZetto’s price increases continued to track the CPI.
Causation
Syntel further argued that Britven’s price erosion opinion omits any analysis of causation linking Syntel’s infringement with price erosion. However, Britven discussed the (1) the use of, and demand for the Facets platform by major healthcare players due to its complexity and customization; (2) the lack of acceptable alternatives to TriZetto before Syntel’s infringement; (3) TriZetto’s adequate staffing resources and (4) the quantified price erosion damages. Britven’s expert report explained that TriZetto and Syntel competed in a two-supplier market where one’s win is the other’s loss, which — if credited by the fact finder — established causation.
Held
The Court denied Syntel’s motion to exclude the price erosion theory presented by Thomas W. Britven.
Key Takeaway:
Although expert testimony should be excluded if it is speculative or conjectural, or if it is based on assumptions that are so unrealistic and contradictory as to suggest bad faith or to be in essence an apples and oranges comparison, other contentions that the assumptions are unfounded go to the weight, not the admissibility, of the testimony.
Case Details:
Case Caption:
Syntel Sterling Best Shores Mauritius Limited V. The Trizetto Group, Inc. Et Al
This action is about holding Chargebacks911 (“CB911”), its CEO (Monica Eaton) and its former CEO (Gary Cardone) accountable for their roles in keeping a massive online Keto diet pill scam (the “Keto Racket”) profitable, viable, and undetected while it victimized Plaintiffs and tens of thousands of other consumers across the country.
Troy Carrothers is Defendants’ rebuttal expert to Plaintiffs’ payment processing industry expert. Plaintiffs took issue with certain opinions given by Carrothers, including that “‘Value Added Promotions used by [Global e-Trading] before 2019 are commonly used marketing programs,” as well as statements that Plaintiffs maintain are impermissible legal conclusions.
Lisl Unterholzner, an accountant and certified fraud examiner, is Defendants’ rebuttal damages expert. Plaintiffs took issue with certain opinions given by and analysis performed by Unterholzner, including her discussion of a The Fulfillment Lab (“TFL”) spreadsheet with shipping addresses and her MID-by-MID and time-limited calculation of damages attributable to Global e-Trading.
Financial Expert Witness
Troy Carrothers is a financial services and retail leader with approximately thirty years of experience working in a variety of leadership roles in retail payments. These responsibilities have spanned operational leadership positions with responsibility for functions with small teams such as Risk Management or Financial Planning & Analysis in payment issuance and acceptance to leading multi-billion dollar retail credit and debit portfolios with thousands of employees.
Lisl Unterholzner is the Managing Partner at Oscher Consulting, PLLC, a Certified Public Accounting firm. Unterholzner is a Certified Public Accountant (“CPA”) and has been accredited in Business Valuation by the American Institute of CPAs. She has also been accredited as a Certified Fraud Examiner. Her experience includes forensic accounting investigations, performing business valuations, and the analysis of economic damages.
Plaintiffs sought to preclude Carrothers from “offering testimony on his general understanding of the term Value Added Promotions, or VAP, including how other companies in the industry may use the term.”
The Court held that Carrothers’ testimony about his understanding of VAP used by other companies does not match the descriptions of Global e-Trading’s VAP program within Global e-Trading’s own internal documents. Moreover, Carrothers admitted during his deposition that he did not “know the details of [Defendants’] VAP program from when they ran it.”
While the issues Plaintiffs pointed out give them ample ammunition for cross-examination, the Court decided that they still did not warrant disqualifying Carrothers from testifying as an expert.
The Court also disagreed with Plaintiffs as to Carrothers’ statement that Global e-Trading “paused service several times” for Brightree. In other words, Carrothers is merely pointing out that Global e-Trading may have had pauses in its provision of services to Brightree, which is true and potentially relevant to Defendants’ defense regarding intent. The Court did not find this statement so irrelevant as to be kept from the jury.
However, to the extent Carrothers intended to offer the legal conclusion that he has seen no evidence in the record to support that Defendants’ VAP program was fraudulent, the Court agreed with Plaintiffs.
Lisl Unterholzner
Plaintiffs sought to preclude Unterholzner from testifying about two subjects. First, they argued that Unterholzner should not testify “about whether any of the customer, email, or shipping data in the TFL Spreadsheet is valid” or offer “any opinions or conclusions about the deliverability of any shipment made by The Fulfillment Lab or the Keto Entities.” Second, they sought to prevent Unterholzner from “parsing or calculating damages in a way that is based on a piecemeal analysis of Defendants’ activities with respect to the overall Keto enterprise.”
The Court disagreed with Plaintiffs. Because Unterholzner is a rebuttal expert, it is perfectly appropriate for her to question the documents upon which the Plaintiffs’ damages expert relied.
To the extent Unterholzner intended to opine that Defendants can only be liable for damages incurred for certain times during which Global e-Trading was providing services to Brightree, the Court excluded that opinion as irrelevant.
However, to the extent Unterholzner’s report and opinions addressed flaws in Plaintiffs’ expert’s damages calculation because of incomplete data, this opinion is permissible. Since this analysis is proper for a rebuttal expert, the Court will not exclude it.
Held
The Court granted in part and denied in part the motion to limit the testimony of Defendants’ experts Troy Carrothers and Lisl Unterholzner.
Key Takeaways:
No witness may offer legal conclusions or testify to the legal implications of conduct.
Despite Plaintiffs’ legitimate questions, the supposed problems with Unterholzner’s methodology can be explored on cross-examination.
This action is about holding Chargebacks911 (“CB911”), its CEO (Monica Eaton) and its former CEO (Gary Cardone) accountable for their roles in keeping a massive online Keto diet pill scam (the “Keto Racket”) profitable, viable, and undetected while it victimized Plaintiffs and tens of thousands of other consumers across the country.
Musante opined that Global e-Trading, which does business as Chargebacks911, “provided critical and necessary support which allowed the fraudulent merchants to continue processing consumer payments. But for [Global e-Trading’s] assistance, the fraud would have either been muted or ended much sooner than it otherwise did.”
Merrifield was “retained to review the documents and the ‘shipping,’ ‘refunds,’ and ‘charge backs’ Excel spreadsheets produced in the [case] in order to determine the differences between amounts that were charged United States customers that purchased either the, ‘buy 2, get 1 free’ (referred to as 3 bottles) or ‘buy 3, get 2 free’ (referred to as 5 bottles) promotion of either Instant Keto, Ultra Fast Keto Boost, or Keto Boost products, and the amounts these customers expected to be charged and is offset by any refunds and charge backs.” She opined that the total damages for the Keto Entities’ diet pill scheme is $18,779,274.
According to Plaintiffs, they offered “Merrifield as an expert for only one thing: to filter and calculate numbers from hundreds of thousands of rows in a spreadsheet. Her assignment was to find select rows in a spreadsheet with values that fit into criteria that Plaintiffs’ counsel provided and to perform math on those values.”
Banking Expert Witness
Kenneth Musante has a Bachelor of Science in Managerial Economics, an MBA, and “graduated from the Pacific Coast Bankers School in Seattle, WA.” He has has more than thirty years’ experience with the banking industry and with the major credit card companies, such as Visa, Mastercard, Discover, American Express.
Kerrie Merrifield is a Certified Public Accountant (CPA) and has over 35 years of experience accounting with an emphasis on forensic accounting and damages calculations. She has been the Director of Litigation Support for Axiom Forensics since 2008.
Global e-Trading maintained that Musante’s report included numerous impermissible legal conclusions, lacked a reliable methodology, and would not be helpful to the jury and is irrelevant.
However, Musante pointed to the documents he reviewed in reaching his opinions based on his experience in the banking and card processing industries. And, in his deposition, Musante explained that he reviewed the complaint and other materials in the case, created an outline based on that review and his experience.
While Defendants may have legitimate questions about Musante’s conclusions based on his document review or take issue with the documents he relied upon, the Court held that these issues can be explored on cross-examination.
While the Court understands Plaintiffs’ position that Musante used the words “fraud” and “fraudulent” in the vernacular sense, the Court is concerned with the potential to confuse the jury by use of these words with legal significance. It is likely a jury would believe Musante was offering a legal conclusion that certain transactions legally constituted fraud. Thus, the Court prohibited Musante from using the words “fraud” and “fraudulent” in offering his expert opinions. However, the Court declined to exclude Musante’s use of the phrase “sham transactions” in relation to the microtransactions scheme or the term “bad actors.” Neither “sham” nor “bad actor” is a legal term of art, and the Court is not concerned about jury confusion over the use of these words.
Moreover, it is permissible for Musante to testify — among other things — that, in his opinion, Global e-Trading “was instrumental” in helping the Keto Entities continue accessing card processing and selling its keto diet pills to consumers. While Musante’s opinions touch on an ultimate issue, Musante does not merely instruct the jury on what result to reach.
Kerrie Merrifield
Defendants also sought to limit the testimony of Kerrie Merrifield. Global e-Trading insisted that Merrifield is unqualified to offer certain opinions, her methodology is unreliable, and her opinions unhelpful to the jury such that her opinions should be excluded under Rules 702 and 403.
Qualification
Global e-Trading insisted that Merrifield was not qualified “to testify competently regarding the matters she intends to address,” specifically regarding “the price U.S. consumers expected to pay for their purchase.” But, indeed, Plaintiffs insisted that they were not offering Merrifield as an expert on consumer expectations.
Although Merrifield’s calculations required an assumption about what consumers expected to pay, the Court did not interpret Merrifield as offering an expert opinion regarding consumer expectations.
Reliability
Merrifield “reviewed various documents that were produced” in discovery and performed “various technical steps” “along with applying forensic accounting procedures in order to properly extract the data needed and to perform an accurate analysis.”
She filtered through data and used data within large spreadsheets of payment and shipping information to calculate the class-wide damages in this case.
The fact that the documents and spreadsheets Merrifield consulted were provided by Plaintiffs and that Merrifield consulted Plaintiffs’ counsel regarding certain assumptions did not render Merrifield an unreliable “mouthpiece” for Plaintiffs’ counsel.
While Defendants may have legitimate questions about Merrifield’s reliance on the data within the spreadsheet or any assumptions underlying her analysis, the Court held that these supposed problems can be explored on cross-examination.
Helpfulness to the Jury
The Court also determines that Merrifield’s opinions and calculations will be helpful to the jury. Defendants are incorrect that Merrifield’s analysis involved “a simple math calculation that most kids in junior high could perform.” Rather, as Plaintiffs point out, the data Merrifield sifted through to make her calculations “is on a spreadsheet containing over 414,000 rows” such that she “had to use advanced Excel techniques to arrive at her numbers.” It is certainly helpful to the jury to have an analysis of the voluminous data from the spreadsheets provided to them rather than reviewing all the data in the spreadsheets themselves to reach a damages calculation.
The Court held that Merrifield’s damages calculation, made after sorting through the voluminous data, will help the jury decide what damages to award, if it finds Defendants liable.
Held
The Court granted in part and denied in part Defendant Global E-Trading, LLC’s Daubert motion to exclude the testimony of Kenneth J. Musante.
The Court denied Defendant Global E-Trading, LLC’s Daubert motion to exclude the testimony of Kerrie Merrifield.
Key Takeaway:
The Court considered all of Musante’s opinions, with the exception of his use of the legal terms “fraud” and “fraudulent,” helpful to the jury. The card processing industry and its procedures are unfamiliar to the average juror. For that reason, the Court held that Musante’s opinions regarding that industry and whether Defendants’ practices violated the rules of that industry or assisted the Keto Entities will be helpful to the jury.
Moreover, the Court held that Merrifield’s consideration of Plaintiffs’ counsel’s hearsay statements, which a reasonable damages expert would consider in conducting her analysis, was permissible under Rule 703.
Asserting various state and federal claims arising from alleged trademark infringement, Sacks Holdings, Inc. (the “Plaintiff” or “Sacks”) sued Grin Natural USA Limited, Grin Holdings Limited, Grin Natural US Limited, and Grin Natural Products Limited (collectively, the “Defendants” or “Grin”) for, inter alia, trademark infringement.
In July 2024, Defendants’ counsel contacted Julianne “Juli” Saitz at FTI Consulting, asking her “to take a look at” the instant “trademark infringement dispute,” as well as to “give [defense counsel Saitz’s] thoughts on potential damages.”
At 8:12 p.m. on Wednesday, October 30, 2024, Defendants produced a second expert report from Saitz (the “New Report”) as well as certain documents (the “New Evidence”) that contain “information relied on by Saitz in forming her opinions.”
Plaintiff sought to exclude the New Evidence and strike the New Report. Defendants opposed both Motions.
Accounting Expert Witness
Julianne Saitz has more than 25 years of experience providing forensic accounting and financial and economic analysis to attorneys in litigation and arbitration, as well as private general ledger accounting expertise.
Saitz holds a B.S. from New York University’s Stern School of Business. She is a Certified Public Accountant in New York, is Accredited in Business Valuation and is Certified in Financial Forensics by the American Institute of Certified Public Accountants.
First of all, Defendants failed to establish either harmlessness or substantial justification for their belated production of the New Evidence.
Defendants contended that the New Report qualifies as a “timely and proper” supplementation.
To begin, as Defendants tacitly concede, the Initial Report opines solely on the parties’ sales, whereas the New Report additionally opines on the parties’ profits. Thus, the New Report offers “new opinions” and calculations; it does not merely “offer[] more details on [Saitz’s] prior calculations” or otherwise supplement her prior opinions.
However, Defendants just failed to provide the (basic) information necessary to begin the five-day objection window until August 26, 2024, a delay that extended the objection window beyond the expert report deadline.
“Second,” Defendants maintained, they “created new financial statements after receiving guidance from Saitz on the details of costs and expense information necessary from deduction of sales to determine profits. That effort took until October.” The Court held that this argument does not show good cause for the violation of Rule 26.
The exclusion of the New Evidence independently necessitates exclusion of those portions of the New Report that rely thereon, and the determination that Plaintiff possesses priority rights to the disputed mark lessens the importance of the New Report’s calculation of Plaintiff’s profits to resolution of this action.
This case, filed more than seventeen months ago, goes to trial in less than three months and even Defendants’ proposed alternative sanction would interject further delay into these proceedings.
In sum, the Court held that the Defendants failed to establish good cause for their belated production of the New Report.
Held
The Court granted the Plaintiff’s motion to exclude the New Evidence and strike the New Report.
Key Takeaway:
Rule 26(e) requires a party to “supplement or correct its disclosure or response . . . if the party learns that in some material respect the disclosure or response is incomplete or incorrect.”
Case Details:
Case Caption:
Sacks Holdings, Inc. V. Grin Natural USA Limited Et Al
Docket Number:
1:23cv1058
Court Name:
United States District Court, North Carolina Middle
This case arises out of Delta’s delayed donut wrapping system. In late 2021, Bon Appetit Danish, Inc. and Bon Appetit Specialty Snacks, LLC (collectively, “Bon Appetit”) and Delta Systems and Automation, LLC’s (“Delta”) entered into a set of three contracts for Delta to manufacture packaging systems for Bon Appetit’s baked goods.
But the donut packaging system failed to launch. After further testing failed to resolve the performance issue, Bon Appetit terminated all three contacts on April 14, 2023.
Bon Appetit sued Delta over a contract dispute involving Overwrapping Systems, claiming $6,214,505 in labor costs as direct damages resulting from Delta’s alleged breach. Bon Appetit’s expert, Joseph Wheat, testified that these labor costs were directly caused by Delta’s failure to deliver properly functioning systems.
Delta countered, arguing that the labor costs were consequential damages, barred by the Limitation of Liability provision, because they stemmed from Bon Appetit’s internal plan to use the Overwrapping Systems.
Delta moved to exclude Wheat’s testimony, asserting that the labor costs were derivative losses arising from circumstances that are particular to the contract or to the parties.
Additionally, Bon Appetit sought to introduce Lyle Rogalla as an expert to testify about the norms, customs, and practices, of the baked goods overwrapping industry.
Delta opposed, arguing that Rogalla was unqualified to testify specifically about donut overwrapping systems and that his opinions were unreliable under Rule 702.
Accounting Expert Witness
Joseph Wheat, CPA/ABV, CFF, is a Senior Vice President at J.S. Held, a global consulting firm specializing in a wide variety of forensic analysis.
A Certified Public Accountant licensed to practice in California since 1993, Wheat has over 20 years of experience testifying as an expert witness on economic damages issues in both federal and state court matters.
Wheat has performed numerous business valuation related to marital dissolutions, tax and estate matters and partnership disputes.
Lyle Rogalla has led the development of advanced packaging and food processing equipment, delivering innovative, high-value solutions that optimize production processes and reduce costs for clients ranging from small businesses to Fortune 100 companies.
His portfolio is enriched by 29 patents, encompassing both utility and design, for industrial and commercial applications. He has collaborated with over 100 machine manufacturers to deliver extensive automation and equipment solutions tailored to the clients’ specific needs.
A. Motion to Exclude Damages Opinions of Joseph Wheat
The Court considered Delta’s motion to exclude the opinion of Bon Appetit’s expert, Wheat, who attributed $6,214,505 in labor costs to Delta’s alleged breach of contract.
The core issue was whether these costs were direct damages, which may be recoverable, or consequential damages, barred by the the Limitation of Liability provision. Direct damages (also called general damages) flow “directly and necessarily from a breach of contract, or that are a natural result of a breach.”
Consequential damages (also called special damages) are “secondary or derivative losses arising from circumstances that are particular to the contract or to the parties.”
In this case, Bon Appetit’s labor costs are considered consequential damages since they stem from Bon Appetit’s unique plan to use the Overwrapping Systems to streamline production and eliminate certain employee positions, a point Bon Appetit will argue through Wheat’s evidence of the system’s added efficiency.
The Court excluded Wheat’s opinion concerning Bon Appetit’s labor costs pertaining to consequential damages.
B. Motion to Exclude Expert Opinions of Lyle Rogalla
Delta moved to exclude the opinion of Bon Appetit’s expert, Rogalla, arguing that he lacked the necessary qualifications to opine on donut overwrapping systems and that his methodology was unreliable under Daubert and Rule 702 due to an alleged lack of supporting facts or data.
The Court disagreed. It found that Rogalla was qualified to testify based on his decades of experience with “solutions for complex automation and packaging needs . . . with emphasis in the food industry,” including “packaging and process automation, the preparation of specifications for the machines and the goods handled by the machines, testing, and modifying the machines and specifications to address both process quality and efficiency.”
Insofar as the Donut System diverged from Rogalla’s experience with other food packaging systems, the Court held that it concerned the weight of his testimony, not its admissibility.
The Court also found that Rogalla had relied on a sufficient factual basis, including the Complaint, contract documents, Delta’s website, and federal regulations. Challenges to the depth or nature of that evidence, the Court concluded, were issues of credibility and weight, appropriate for cross-examination, not grounds for exclusion.
Held
The Court granted Delta’s Daubert motion to exclude Joseph Wheat’s opinions.
The Court denied Delta’s Daubert motion to exclude the testimony of Lyle Rogalla.
Key Takeaways:
Not all foreseeable damages are direct damages, as consequential damages may be “foreseeable and proximately caused by the breach of a contract.”
An expert might draw a conclusion from a set of observations based on extensive and specialized experience.
Case Details:
Case Caption:
Bon Appetit Danish, Inc. v. Delta Sys. & Automation LLC
Docket Number:
2:23cv04305
Court Name:
United States District Court for the Central District of California
Plaintiff Kuantay Reeder filed a civil rights lawsuit against Jason Williams, the Orleans Parish District Attorney, in his official capacity. Reeder had spent more than 26 years in prison following a wrongful conviction for murder. He claimed the Orleans Parish District Attorney’s Office (OPDA) violated his right to due process by failing to disclose exculpatory evidence.
To support his damages claim, Reeder identified two expert witnesses: Elizabeth Martina, a vocational rehabilitation counselor, and Harold Asher, a certified public accountant. Martina was expected to testify about Reeder’s lost earning potential. She argued that, if not wrongfully imprisoned, Reeder could have become a highly paid electrician. Harold Asher, has used this premise to opine that Reeder should be entitled to $2,286,663 consisting of past and future lost wages and benefits. Williams argued for the exclusion of both experts’ lost wage and benefit evidence. His reasoning is that this evidence entirely overlooks two crucial aspects of Reeder’s past: his unremarkable employment history before his incarceration and his significant criminal record prior to that time.
Reeder hired Professor Dane Ciolino as an expert witness to testify on two key issues: first, whether the prosecution of Reeder violated the standard of care concerning a prosecutor’s obligation to disclose exculpatory evidence; and second, whether the policies of the Orleans Parish District Attorney’s Office (OPDA) in place during Reeder’s prosecution failed to meet the standard of care for supervising prosecutors.
Williams sought to exclude Ciolino’s testimony. Williams contended that while Ciolino presents opinions on “standards of care,” no such relevant standard exists in this particular case. Furthermore, Williams asserted that other opinions in Ciolino’s report represent inadmissible legal conclusions.
Law And Legal Expert Witness
Dane S. Ciolino currently serves as the Alvin R. Christovich Distinguished Professor of Law at Loyola University New Orleans School of Law. His teaching interests include Professional Responsibility, Evidence, Advocacy, and Criminal Law.
Professor Ciolino graduated cum laude from Rhodes College in 1985, and magna cum laude from Tulane Law School in 1988, where he was inducted into Order of the Coif and selected as Editor in Chief of the Tulane Law Review.
Elizabeth Martina is a licensed Rehabilitation Counselor in the State of Louisiana and has national certifications as a Certified Rehabilitation Counselor and as a Certified Life Care Planner. She has practiced in the field of vocational rehabilitation for over 17 years and is a board-approved supervisor for provisionally licensed Rehabilitation Counselors.
Harold Asher is a managing director for Asher Meyers, a Metairie firm that provides forensic accounting services. He holds a B.S. and an M.B.A. from Tulane University, having earned the latter degree with a concentration in accounting and finance. He is also a Certified Public Accountant and has over 40 years of experience in providing expert forensic accounting services in conjunction with litigation.
Alternatively, as Reeder proposes, the jury should be permitted to assess Martina’s expert opinion—specifically, that Reeder’s life would not have been spent dealing drugs or in prison but would have instead evolved to resemble his current state, albeit sooner. In support of this, Reeder emphasizes that Williams retains the opportunity to thoroughly cross-examine Martina regarding her expert conclusions. Ultimately, the Court concurred with this view.
However, Williams further objected to the fact that Reeder’s calculations for lost wages/benefits are predicated on a 1991 injury date, despite the allegedly wrongful conviction not taking place until 1995. Consequently, the Court held that Reeder must revise Asher’s report to accurately reflect a 1995 injury onset date and also to appropriately reduce the lost wage/benefit figures to account for avoided expenses.
Motion to Exclude Dane Ciolino’s Testimony
Subsequently, Ciolino produced a report. In this report, he opined that the Orleans Parish District Attorney’s Office (OPDA) failed to comply with the standards of care and conduct governing prosecutors, as well as their constitutional obligations to provide Brady material, during the 1994 and 1995 prosecutions of Kuantay Reeder.
Furthermore, he concluded that the OPDA Policy Manual in effect at the time of these prosecutions was inadequate to properly convey those obligations to its staff.
The Plaintiff seeking to recover for a Brady violation in a civil rightslawsuit must establish three elements: 1) that the State suppressed evidence by failing to disclose it to the Defendant; 2) that the undisclosed evidence was favorable to the Defendant by helping to show the Defendant’s innocence or by impeaching an unfavorable witness; and 3) that the nondisclosure prejudiced the Defendant because it was “material,” i.e., there is a “reasonable probability” that the trial outcome would have changed if the prosecution had turned over the evidence.
Analysis
In his opposition, Reeder clarified, however, that he would not seek to offer Ciolino’s opinions regarding whether a Brady violation had actually occurred in his case. Consequently, Williams’s concerns about Ciolino potentially attempting to testify about an “ultimate legal conclusion” were then moot.
The Court agreed with Williams that aside from whether a Brady violation occurred in Reeder’s criminal prosecution, there is simply nothing left for Ciolino to opine about.
Aside from the aspects of the report that discuss the law pertaining to Brady obligations and why Ciolino believes that a Brady violation did in fact occur (which Reeder now concedes he will not attempt to elicit at trial), Ciolino’s opinions are based on state law ethical standards. Reeder’s claim is governed by federal law not state law.
In his report, Ciolino, moreover, dedicates a specific section to opining on why the 1987 OPDA Policy Manual inadequately outlines a prosecutor’s Brady obligations, asserting that the Policy is vague and fundamentally insufficient. However, Williams contends that this particular opinion is irrelevant because Ciolino lacks knowledge regarding how the Policy Manual was actually implemented or what other measures were undertaken to train or supervise prosecutors. Indeed, the Court concurs with Williams’s assessment.
Held
The Court granted the motion to exclude the testimony of Dane Ciolino. As the Court has outlined, Reeder is required to revise his expert reports from both Martina and Asher in the manner previously detailed.
Key Takeaway:
The central issue of liability in this case hinges on whether a Brady violation took place. Consequently, the Court concurs with Williams’ argument that permitting Ciolino to testify about state law ethical standards, which are not determinative of liability here, would likely confuse the jury.
Furthermore, the Court finds it unclear how Ciolino could offer informed opinions on the Policy Manual’s adherence to a prosecutor’s Brady obligations under federal law if he is not allowed to testify about the relevant legal standards governing this case.
Case Details:
Case Caption:
Reeder V. Williams
Docket Number:
2:22cv4614
Court Name:
United States District Court Eastern District of Louisiana
On June 15, 2020, Michael J. Fitzgerald and Ronda and Will McNae finalized a Settlement Agreement to resolve claims related to alleged rape and sexual assault. This agreement included Fitzgerald paying a sum of money and, in return, the McNaes releasing their claims, agreeing not to contact Fitzgerald’s employer, SoftwareONE, refrain from writing about him directly and indirectly, and avoid disparaging him. Fitzgerald is now pursuing the only claim remaining in this case, a breach of contract claim against Ronda McNae for breach of the Settlement Agreement.
On March 5, 2025, this Court entered its Order Granting Plaintiff Fitzgerald’s Motion for Partial Summary Judgment as to Liability, finding that Defendant Ronda McNae breached the Settlement Agreement. This case is soon proceeding to trial to determine damages Plaintiff has sustained from Defendant Ronda McNae’s breach of the Settlement Agreement.
Plaintiff Fitzgerald disclosed three experts in connection with this case. First, he disclosed Sheri Fiske, a certified public accountant, who will testify to Fitzgerald’s purported economic damages. Second, Plaintiff disclosed Dr. Michael DiTomasso, a forensic psychologist, to testify as to his non-economic, reputational damages. Third, Plaintiff disclosed Dr. Kim Fromme, a clinical psychologist to testify that Defendant Ronda McNae’s memory of having been raped and assaulted is false, and that the parties engaged in consensual sexual relations. Defendant Ronda McNae seeks to exclude the expert opinions of these three expert witnesses pursuant to Federal Rule of Evidence 702.
Accounting Expert Witness
Sheri Fiske Schultz brings extensive experience to the table, with over 35 years in public accounting and more than 30 years of specialized expertise in the fields of forensic accounting and business valuations.
In addition to being a licensed CPA, Sheri holds the designation of Accredited in Business Valuation (ABV) and is Certified in Financial Forensics (CFF) by the American Institute of Certified Public Accountants (AICPA).
Michael DiTomasso has specialized in the clinical and forensic evaluation of children and their parents in cases involving sexual and physical abuse, neglect, domestic violence, and systemic family pathology. He has been recognized by various courts as an expert in the areas of Child Abuse and Neglect, Domestic Violence, and Family Functioning on hundreds of occasions. DiTomasso also handles many Juvenile Delinquency and Adult Criminal cases. He holds a Ph.D. in Clinical Psychology from The Universityof Miami.
Kim Fromme, Ph.D., is Professor Emeritus of Clinical Psychology at The University of Texas at Austin. She has over 120 peer-reviewed publications focused on alcohol use and the effects of alcohol intoxication, including blackouts, cognitive processes, and behavioral risks. Consequently, she provides unique expertise in legal cases that involve alcohol, behavior, thinking, and memory.
Fromme has been qualified to opine on these matters in 20 civilian criminal cases, 16 civil and Title IX matters, and 53 military courts-martial. She has successfully passed three Daubert challenges.
Initially, the Defendant contended that Fiske’s calculations for lost quarterly and annual bonuses were unreliable and not useful. Their primary argument was that Fiske could not accurately determine Fitzgerald’s target bonus earnings. In response, the Plaintiff asserted that the Defendant overlooked the 2022 Salary Review Letter, which guaranteed specific bonus amounts (100,000 GBP quarterly and 120,000 GBP annually) as well as a a salary increase independent of company performance or Fitzgerald’s individual target achievement. Consequently, the Court rejected the Defendant’s motion on this particular point.
Defendant argued that Fiske’s calculations of the lost value of performance share units (PSU) are unreliable. Specifically, Defendant argued that Fiske’s initial calculation was incorrect. Later, Fiske updated her estimate prior to her deposition to reflect a lower, more conservative estimate of lost PSUs based on more recent information provided to Fiske from SoftwareONE dated June 6, 2023, which Fiske received after issuing her May 15, 2023 Damages Report but before her deposition on June 7, 2023.
Nonetheless, Defendant still sought to exclude the supplemental report arguing that Fiske does not know the basic facts to allow her to express a reliable opinion about the PSUs. However, when Fiske received the updated information from SoftwareONE, Fiske compared the number of PSUs Fitzgerald actually received to the number he was promised. Therefore, the Court, once again, rejected the Defendant’s motion as to this aspect.
The Court defers ruling on the following issues:
Whether Fiske’s testimony as to calculation of the full contract amount is not helpful
Whether Fiske should not be permitted to testify about facts and evidence that are irrelevant to her purported calculations.
Should Plaintiff seek to introduce such testimony that Defendant moves to exclude, the parties shall argue this issue to the Court outside the presence of the jury.
Dr. Michael DiTomasso
Plaintiff Fitzgerald “sought damages for the reputational harm caused by McNae both in the industry he spent his life working in, and at SoftwareONE, which he dedicated his professional life building” and “sought damages due to the personal harm he has suffered to his mental health, emotional wellbeing, and enjoyment of life.”
Defendant argued that DiTomasso was unqualified to offer an opinion on damages, specifically because he is not board certified, is not an expert in the technology market, and is not an occupational therapist. This Court agreed with Defendant that DiTomasso was unqualified to testify as to reputational damages. When asked what qualifications he has to opine on the amount of damages that should be awarded in this case, DiTomasso himself stated “none.” As to emotional damages, this Court held in its Order Granting in Part and Denying in Part Defendant Ronda McNae’s Motions in Limine that any evidence or testimony related to emotional distress will be excluded.
Kim Fromme
Defendant sought to exclude Fromme’s testimony arguing it is unreliable, unhelpful, and that the issue of whether a rape occurred is for the determination of the jury.
However, Fromme’s testimony will be necessary only if the defense of duress is permitted. Since this Court ruled in its Order Granting Plaintiff’s Motion for Summary Judgment that Defendant Ronda McNae’s duress defense will not be permitted, the Court declared this issue moot.
Held
The Court granted in part and denied in part the Defendant Ronda McNae’s motion to exclude the opinions of Sheri Fiske Schultz, Dr. Michael DiTomasso, and Dr. Kim Fromme.
Key Takeaway:
Fiske’s calculations of lost quarterly and annual bonuses are not unreliable just because the Defendant overlooked crucial piece of evidence i.e the 2022 Salary Review Letter.
DiTomasso is unqualified to offer an opinion on damages, specifically because he is not board certified, is not an expert in the technology market, and is not an occupational therapist.
Back in 2012, Travelers Casualty & Surety Company of America (Travelers) provided Aluma Construction Corporation with a General Agreement of Indemnity and issued surety bonds guaranteeing Aluma’s completion of three construction projects in Puerto Rico. After being obligated to pay out on these bonds, a situation covered by the indemnity agreement with both the company and individual guarantors, Travelers initiated this lawsuit to recover their surety payments, along with associated costs and expenses, from those indemnifiers.
Additionally, Travelers claimed to have paid Aluma’s subcontractors, workers, and suppliers, thus asserting their right of subrogation against the Puerto Rico Aqueduct and Sewer Authority (PRASA) for those payments. What began as seemingly direct claims by Travelers against the project owner and the indemnifiers evolved into a complex legal battle involving PRASA, Aluma, and the indemnifiers, all disputing responsibility for construction delays and incurred costs. Chubb Insurance Company, a third-party defendant in this case, is an insurer of PRASA.
PRASA filed a motion in limine to exclude Carlos J. Iglesias Colon as Aluma’s financial expert on the grounds that Iglesias Colon has a conflict of interest violative of Puerto Rico’s Anti-Corruption Code.
Accounting Expert Witness
Carlos J. Iglesias Colon is a certified public accountant in the Commonwealth of Puerto Rico. He performed business valuations for sale of companies, tax purposes and litigation purposes for numerous companies.
He has served as an expert witness and consultant in financial matters in over 50 construction projects and court cases, specializing in construction project damages including home office overhead, site overhead and loss of labor productivity, among others.
PRASA sought to disqualify Aluma’s expert witness, arguing that a conflict of interest existed due to his professional history with ECOVAL, LLC, where he had previously worked and currently served as Managing Partner. PRASA further contended that ECOVAL, a financial and litigation support firm, is currently retained to provide support to multiple executive agencies of the Puerto Rico government.
According to PRASA, the Anti-Corruption Code “was instituted by the legislature of the Commonwealth of Puerto Rico specifically to prohibit private contractors from obtaining direct benefits through governmental contracts, and at the same time profiting at the expense of the government by representing private interests against it.”
PRASA added “Iglesias is currently deriving income from his role as managing partner for ECOVAL, a juridical person who has contracts with the government of Puerto Rico; at the same time and because of this litigation, Iglesias is being paid to testify against PRASA, a public corporation.”
B. Aluma’s Opposition
Aluma maintains that “although ECOVAL represents other governmental agencies,” Aluma explains, “it does not represent and has not represented PRASA.” In other words, the contract between ECOVAL and other government agencies did not preclude Iglesias from participating in the trial as an expert witness in a case against other agencies or public corporations.
Aluma contended that the exclusion of Iglesias was unwarranted under Federal Rules of Civil Procedure 26 and 37, Federal Rule of Evidence 702, or any pertinent professional code of ethics governing CPA conflicts of interest. Furthermore, Aluma asserted that ECOVAL had not represented PRASA and held no confidential information obtained from PRASA; in addition, ECOVAL had no duties or obligations towards PRASA. Therefore, Aluma maintained that no conflict of interest existed for Iglesias in the matter at hand.
1. The Anti-Corruption Code
Whether PRASA fits within the Anti-Corruption Code’s definition of “executive agencies”
The first question is whether PRASA fits within the Anti-Corruption Code’s definition of “executive agencies.” PRASA argues that it is an executive agency; Aluma says it is not. The definition of “executive agencies” is found at §1883(a):
The bodies and entities of the Executive Branch of the Government of Puerto Rico, including public corporations, departments, agencies, offices, municipalities, or other instrumentalities.
While Aluma uses the term “independent public corporation,” the Court, however, has no basis to conclude that PRASA is not a public corporation falling within the Anti-Corruption Code’s definition of “executive agency.” Indeed, the parties’ recent joint proposed jury instructions included this very point as a stipulated fact, further supporting this conclusion.
Whether the Anti-Corruption Code should properly be interpreted as broadly as PRASA maintains in its motion in limine
Turning to the second, and ultimately determinative, question: whether the Anti-Corruption Code should be interpreted as broadly as PRASA maintains in its motion in limine. Specifically, PRASA argues that if an expert witness performs any work for any executive agency of the Commonwealth of Puerto Rico, that expert is automatically barred from testifying against any other Puerto Rican executive agency. In support of this position, PRASA points to the fact that Iglesias is the “managing partner of ECOVAL, a juridical person who has contacts with the government of Puerto Rico.” While neither PRASA nor Aluma disclose the specific executive agencies with which ECOVAL has dealings, Aluma asserts that Iglesias’ firm’s work does not involve PRASA. For the purpose of ruling on this motion, the Court assumes the truth of that contention.
Conflict of Interest
The Court does not conclude that the Puerto Rico Legislature intended the Anti-Corruption Code to bar the expert testimony of a witness against one executive agency simply because their firm does some work for another, unrelated executive agency, particularly when the subjects of their testimony are distinct. Firstly, the Code itself focuses on whether a person has a “conflict of interest” in dealing with the specific executive agency in question. Indeed, in § 1883(b), the Anti-Corruption Code defines “conflict of interest” to mean “a situation in which a personal or financial interest is or could reasonably be incompatible with the public interest.”
Furthermore, while it is readily apparent why a person who gains confidential governmental information while working for one executive agency should be prevented from using that same information to gain an unfair advantage against that very agency, the Court held that it is considerably more difficult to understand how a person who possesses no insider information against a particular executive agency should be forbidden from offering expert testimony against that agency.
Confidential Information
Secondly, the Anti-Corruption Code provides a detailed definition of “confidential information.” Specifically, the Code expressly prohibits a person from using “confidential information acquired in the course or as [a] result of any task entrusted thereto under a contract by the Government of Puerto Rico.” However, PRASA does not contend that Iglesias proposes to use any confidential information as defined by the Code in offering his expert opinions against PRASA. In fact, all PRASA offers on this point is its conclusory concern that “Iglesias is getting paid to testify against the same government that pays his employer and thus, his conflict of interest goes beyond a mere appearance; it is an unavoidable reality and precisely the conduct that sec. 1883a of the Anti-Corruption Code prohibits.”
Appearance of a Conflict of Interest
Thirdly, while PRASA is correct that the Anti-Corruption Code contemplates the “appearance of a conflict of interest,” the precise language of the statute strongly suggests that its reach is limited to work against the executive agency that hired the person. To illustrate this point, the statute states:
“(n) No person shall enter into contracts with executive agencies if there is any conflict of interests. Every person shall certify that he does not represent private interests in cases or matters that involve conflicts of interest, or of public policy, between the executive agency and the private interests he represents.”
Notably, the Puerto Rico Legislature was careful to use exact language, forbidding conflicts of interest “between the executive agency and the private interests he represents.” Moreover, while the Anti-Corruption Code prohibits the appearance of conflicts of interest, the Court interprets the statute as preventing the appearance of only those conflicts of interest within the meaning set forth in the Anti-Corruption Code.
In essence, the Court disagrees with PRASA’s overly broad interpretation of the Anti-Corruption Code. Rather, the Court finds, as Aluma argues, that because Iglesias and his firm have had no dealings with PRASA and have not obtained any relevant confidential information from their work with other executive agencies, no conflict of interest exists under the Anti-Corruption Code that would bar Iglesias from testifying.
2. Conflicts of Interest Among Expert Witnesses
Section 3.2(c) of the Anti-Corruption Code provides:
“Every person shall observe the precepts and principles of excellence and honesty that cover his profession, in addition to the ethical standards or rules of the Association or College of which he is a member and that regulate his trade or profession in the relationship with his competitors as well as with the Government of Puerto Rico and its employees or officials.”
In this provision, the Anti-Corruption Code incorporates the codes of conduct of the profession or trade of the expert. As Aluma correctly notes, PRASA has failed to identify any professional code of conduct that Iglesias allegedly violated. Consequently, this particular provision of the Anti-Corruption Code did not alter the Court’s determination that PRASA’s motion in limine to disqualify Iglesias under this Code is without merit. In conclusion, the Court held that PRASA has not demonstrated a violation of the Anti-Corruption Code by Iglesias and therefore denied PRASA’s motion in limine to exclude him on this ground.
Held
The Court dismissed without prejudice PRASA’s motion in limine regarding disqualification of Carlos J. Iglesias Colon as Aluma’s financial expert.
Key Takeaway:
While the Legislature’s determination to eradicate corruption is laudable, an interpretation of the Anti-Corruption Code as broad as the one urged by PRASA would have the counterintuitive impact of severely limiting the pool of experts available to testify against executive agencies, even where there is no conflict of interest.
In today’s world, the interrelationship between the government writ large and experts of all types is so ubiquitous that PRASA’s expansive interpretation of the Anti-Corruption Code would eliminate large swaths of potential experts who would otherwise be allowed to testify against the government of Puerto Rico, essentially limiting those who could testify against executive agencies to a miniscule number within Puerto Rico or to experts from outside Puerto Rico.
Case Details:
Case Caption:
Travelers Casualty & Surety Company Of America Et Al V. Vazquez-Colon Et Al
Docket Number:
3:18cv1795
Court Name:
United States District Court for the District of Puerto Rico
Ink 477, LLC and Grove Ink, LLC, operating the Miami restaurant and bar “Amal” and “Level 6,” are accused by former employee Jose Petersen of violating the Fair Labor Standards Act (FLSA). Petersen, who worked as waitstaff at Amal from June to September 2022 and then at Level 6 from May to September 2023, claims the companies failed to pay him proper overtime, withheld agreed-upon service charges, and illegally confiscated portions of his earned tips.
As mandated by the Court’s scheduling order, the Defendants submitted their expert disclosures on October 18, 2024, identifying Christopher Nadeau as a forensic accounting and valuation expert. Nadeau’s report, which included an appendix listing the documents he reviewed, was provided. However, the actual documents themselves were not attached.
A week later, on October 25, 2024, the Plaintiff filed a motion arguing that the Defendants’ disclosure was insufficient. The Plaintiff claimed that Nadeau’s report vaguely referenced the reviewed documents, making them difficult to locate within the Defendants’ existing document production. They asserted that Rule 26 of the Federal Rules of Civil Procedure does not require the opposing party to search for the data used by the expert. Consequently, the Plaintiff argued that the Defendants failed to comply with the scheduling order because Nadeau’s report did not include the “facts or data” he analyzed.
Prior to the Defendants’ response, the Court held a discovery hearing on November 4, where the Plaintiff demanded the “31 documents” Nadeau reviewed. The Court rejected this interpretation of Rule 26, stating that it does not require experts to attach all underlying documents to their reports. The Court subsequently issued a written order confirming that listing the reviewed documents in an appendix, as Nadeau did, is standard litigation practice.
Accounting Expert Witness
Christopher M. Nadeau, CPA, CMA, CVA, is a forensic accounting professional and valuation analyst with experience supporting litigation across a range of commercial disputes. His work primarily focuses on economic damages analysis and business valuation for various industries including automobile dealerships, manufacturing, restaurants, and real estate.
He specializes in calculations related to personal injury and wrongful termination cases.
Nadeau is a licensed Certified Public Accountant in the State of Massachusetts. He also holds credentials as a Certified Management Accountant (CMA) from the Institute of Management Accountants and as a Certified Valuation Analyst (CVA) from the National Association of Certified Valuators and Analysts.
In their response to the Plaintiff’s motion, the Defendants cited the Court’s ruling, emphasizing that Rule 26(a)(2) only requires identification of the reviewed items, not their production. The Plaintiff, in their reply, countered by stating that the Defendants did not produce the relevant discovery documents until November 1, after the initial discovery deadline, the expert disclosure deadline, and the filing of their motion.
The Plaintiff’s central claim is that the Defendants’ expert disclosure was deficient because it lacked the underlying “facts or data” used by the expert. However, the Court maintained that Rule 26 did not mandate attaching all supporting documents to an expert report. While not required to provide all raw data, the Defendants did furnish a link to the documents listed in the expert’s appendix. Furthermore, the Plaintiff received this link well in advance of the discovery deadline and trial, ensuring sufficient notice of the expert’s opinions and supporting data. The Court ruled that Nadeau’s report provided the correct kind of appendix, and that was all he needed to do to satisfy Rule 26.
Held
The Court denied the Plaintiff’s motion to strike Defendants’ expert disclosures.
Key Takeaway:
While the language of Rule 26 could be construed to support the Plaintiff’s argument, the courts have consistently interpreted it otherwise. Rule 26 requires a statement of the data considered by the expert, but does not require the expert to include the data itself.
This case involves a dispute over the alleged misuse of funds from two New Mexico payday lending businesses, Cashco, Inc. and Budget Payday Loans, L.P. The Light Defendants (John Ernest Light, Tina S. Light, and Investors Services, Inc.) were hired to manage the financial operations of these businesses, including record-keeping and transaction processing.
They were given access to the operating accounts in exchange for a monthly fee. The owners of the businesses (Randall C. Roche, Ronald Tsuchiyama, Michael Harada, and William Montelongo), through their entity HiTex, LLC, claim that the Light Defendants abused this access, diverting approximately $360,000 for their own use, rather than distributing it to the rightful owners. HiTex, LLC, has filed a lawsuit asserting claims of breach of contract, breach of fiduciary duty, conversion, fraud, unjust enrichment, and negligence, seeking $320,000 in damages.
Plaintiff sought to exclude the opinions and testimony of the Light Defendants’ retained expert, Ted Blodgett. The Light Defendants, in turn, sought to exclude the opinions and testimony of Plaintiff’s retained expert, David Bloom.
Accounting Expert Witnesses
Ted Blodgett, managing partner of Gray, Blodgett & Company, PLLC, possesses 30 years of public accounting expertise. He specializes in tax planning, business valuations for estate and gift tax, and litigation support. A seasoned expert witness, he regularly testifies in Oklahoma courts on complex accounting and tax matters, including marital dissolution.
David Bloom has over 40 years of public accounting experience as a private business executive, business consultant, and forensic accountant, has served as Chief Financial Officer, interim Chief Financial Officer, and consultant to private businesses of various sizes on matters of taxation, accounting policy, and audit. He is an active Certified Public Accountant in the State of Oklahoma, license number 15384 and a graduate from Southern Nazarene University.
Blodgett’s expertise is unchallenged by the Plaintiff, and the Court confirmed that Blodgett’s accounting and valuation background qualified him to provide expert opinions.
Blodgett’s Opinions are Sufficiently Reliable
Plaintiff argued that Blodgett’s analysis is flawed, claiming he failed to adequately consider the case’s documents and evidence. Specifically, they criticized his hypothetical, stating that “Plaintiff cannot have suffered damages if a distribution was recorded as a distribution payable and then later distributed,” rendering his opinions “inconsistent with the evidence produced.”
The Light Defendants countered that the Plaintiff’s interpretation of Blodgett’s hypothetical “are contrary to Blodgett’s own explanation of his hypothetical.” They further asserted that Blodgett’s limited scope of work justified reviewing only a “narrow set of documents,” and therefore, any omissions affect “the weight of Blodgett’s testimony, not its admissibility.”
The Court concurred with the Light Defendants. It found that the Plaintiff’s concerns primarily address the weight of Blodgett’s testimony, not its admissibility. The fact that Blodgett did not review all evidence deemed relevant by the Plaintiff does not automatically disqualify his testimony. The Plaintiff retained the right to challenge Blodgett’s analysis during cross-examination.
Given the limited scope of Blodgett’s testimony, the Court concluded that his conclusions are reasonably based and will aid the fact-finder. The Plaintiff’s objections pertain to the “weight of Blodgett’s testimony” and are more appropriately explored during cross-examination at trial.
The Bloom Motion
Bloom is qualified to offer his opinions
The Light Defendants contended that although Bloom may possess general accounting qualifications, he lacks the specific expertise in “forensic accounting, financial forensics, and/or fraud investigation” necessary to testify in this case. Consequently, they argue that his opinions should be excluded. Conversely, the Plaintiff asserts that Bloom’s “rigorous education” as a Certified Public Accountant qualifies him. Furthermore, addressing the Light Defendants’ claim of insufficient specialized knowledge, the Plaintiff cites the Association of International Certified Professional Accountants, stating that “all CPAs, including Bloom, possess the specialized knowledge and investigative skills required to perform forensic accounting services.”
Ultimately, after reviewing Bloom’s report and deposition testimony, the Court, even though acknowledging it’s a close decision, finds Bloom qualified to offer opinions on the topics presented. Indeed, while Bloom may not have the specific forensic accounting credentials the Light Defendants deem crucial, this perceived deficiency relates to the weight a jury should assign to his testimony, rather than its admissibility. Therefore, the Court determines that Bloom is qualified by knowledge, skill, experience, training, or education to provide the opinions outlined in his report.
Bloom’s Opinions are Sufficiently Relevant
The Light Defendants further argued that, in their view, Bloom’s opinions lacked relevance, asserting they did not “fit with the issues of this case.” In particular, they claimed Bloom addressed matters beyond the “four (4) transactions giving rise to the distributions allegedly owed to the Owners and the damages the Owners sustained in not receiving those distributions.”
On the other hand, the Plaintiff maintained that Bloom’s challenged opinions are relevant to demonstrate “that Defendants no longer have access to the funds intended to be used for distributions and, therefore, such distributions cannot be paid to Plaintiff.” Furthermore, the Plaintiff asserted that Bloom’s opinions bolster their theory that the Defendants commingled funds, effectively rendering them untraceable.
Ultimately, after careful consideration, and for reasons largely consistent with those discussed later, the Court deemed Bloom’s opinions sufficiently relevant. To be sure, the Light Defendants retained the right to scrutinize the perceived weaknesses in Bloom’s analysis during cross-examination, particularly regarding the four transactions outlined in the Complaint, or any other perceived deficiencies. Nevertheless, the Court is convinced that Bloom’s testimony is “sufficiently tied to the facts of the case [such] that it will aid the jury.”
Bloom’s opinions are sufficiently reliable
The Light Defendants then argued that Bloom’s opinions lacked reliability, claiming they did not “rely upon any explained methodology.” Specifically, they criticized Bloom for failing to “connect the dots between the materials he reviewed and his own education or experience to then detail the supporting bases for his opinions.”
Conversely, the Plaintiff asserted that “any trained CPA with Bloom’s experience and education would be able to conduct the same analysis Bloom had done with the same documents.” Moreover, the Plaintiff contended that, because Bloom had based his opinions on both his experience and the case’s documents, rather than solely one or the other, his opinions were sufficiently reliable.
Ultimately, after careful consideration, the Court determined that Bloom’s opinions were sufficiently reliable, and that the Light Defendants’ arguments pertained to the weight of those opinions, not their admissibility. In essence, the Court disagreed with the assertion that Bloom’s report “was unreliable because [he] either did not employ or failed to disclose any particular methodology.”
Held
The Court denied the Plaintiff’s Daubert motion to strike the testimony of Defendants’ expert witness Ted Blodgett.
The Court denied the Defendants John Ernest Light, Tina S. Light, and Investors Services, Inc.’s motion to exclude the testimony of the Plaintiff’s expert witness David Bloom.
Key Takeaway:
Despite challenges regarding the scope of reviewed materials, specialized expertise, relevance, and methodology, the Court found both experts, Blodgett and Bloom, qualified to offer their opinions. The Court emphasized that critiques concerning the experts’ analysis, including perceived omissions or methodological shortcomings, primarily affect the weight of their testimony, not its admissibility. Consequently, the Court deemed cross-examination the appropriate venue for addressing these concerns, ensuring the jury could properly evaluate the experts’ credibility and the strength of their conclusions.
