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  • Supply Chain Expert Witness’ Assessment of Defendant’s Performance Limited

    Supply Chain Expert Witness’ Assessment of Defendant’s Performance Limited

    In 2007, Plaintiff Ghirardelli and Defendant, GXO Warehouse Company, signed a services agreement for Defendant to provide warehouse management services at a warehouse in Lathrop, California (the “Services Agreement”). Defendant’s role was that of a third-party logistics provider (“3PL”), and the services it was to provide included the implementation of a computerized warehouse management system (a “WMS”). The parties contemplated Defendant would utilize a proprietary WMS it had developed called WM10, but the implementation was not as successful as the parties anticipated. The parties’ business relationship soured which led to them asserting claims against each other in this case.

    Defendant designated Dale Warnke as an expert to testify about various aspects of Defendant’s performance. Plaintiffs filed a motion based on Rule 702 of the Federal Rules of Evidence to exclude some of Warnke’s opinions.

    Warnke’s CV stated he was a “supply chain-logistics associate” at an engineering firm. In his initial report, he offered various opinions related to (1) the impact Plaintiffs’ choices regarding construction and other matters had on Defendant’s performance, (2) other difficulties Defendant faced that were not of its making, and (3) the quality of Defendant’s performance. Plaintiffs argued that Warnke’s opinions should be struck in their entirety because he was not qualified to give them. Alternatively, they argued certain opinions were impermissible legal opinions or opinions about a party’s intent or state of mind.

    Supply Chain Expert Witness

    Dale Warnke began his career in 1973 at Roadway Express, one of the largest carriers in the industry. In 1995, he moved to FedEx, where he worked for about 22 years in its third party logistics provider (“3PL”) arm, rising through the ranks to senior management positions overseeing numerous warehouses. Warnke boasts of hands-on work and management experience in both warehouse and carrier operations covering all aspects of the inventory lifecycle, from inventory receipt at the inbound receiving docks, putaway, inventory control at the warehouse, picking orders, staging and loading for outbound shipping, all the way to shipment to the end customer. Warnke received a Certification on Supply Chain Modeling Management through a course taught by an M.I.T. professor. Warnke also received a Logistics Design and Application Certificate from the University of Tennessee. He was previously a member of the Council of Logistics Management, and he presented to the group during the national meeting. Warnke’s experience in the supply chain industry did not end with his departure from FedEx in mid-2017. Warnke works with professors at both Michigan State University (“MSU”) and Eastern Michigan University (“Eastern Michigan”) in the schools’ respective supply chain programs. Warnke guest lectures undergraduate classes at both universities on industry trends and on applying academic principles to the real world. 

    Discussion by the Court

    Plaintiffs cited Warnke’s lack of experience to assert that he lacked the necessary qualifications to offer opinions in this case.

    Warnke’s experience can be summarized as follows: From 1973 to 1995, Warnke worked at Roadway Express. There, he was responsible “for the operations and startup of terminals which were very, very much like warehouses” with “the biggest distinction” between them being that, in a terminal, “inventory . . . always pretty much remains in motion” with very little intentional storage. After working at Roadway Express for more than twenty years, Warnke worked for FedEx. For most of his 20-year tenure there he worked in a division that provided 3PL services to other companies. In other words, he was employed by FedEx and assigned to work on behalf of one or more of its customers, such as General Motors or Chrysler, in areas related to warehouse operations and logistical services. His work in this capacity involved both start-up of new warehouses and the operations of other warehouses. He was also involved in utilizing WMSs, and had responsibility for implementing them, although he has not designed them.

    According to Plaintiffs, Warnke’s experience at Roadway Express was of no relevance considering he was responsible for terminals and not warehouses. Despite Warnke’s involvement in starting two warehouses while working at FedEx, Plaintiffs argued that the experience was of minimal value because that involvement was more than twenty years ago. Plaintiffs contested the sufficiency of Warnke’s extensive experience in operating warehouses and objected to his lack of specific experience in the food and beverage industry.

    Plaintiffs asserted that in order to qualify, the expert had to have experience relevant to the recent start-up of a warehouse in the food and beverage industry. The Court held that just because a “more qualified” expert with experiences more narrowly tailored to the case can be envisioned did not mean that a “less qualified” expert cannot offer opinions on the subject. In other words, Plaintiffs have simply (1) defined the relevant topics very narrowly and (2) described Warnke’s experiences as different, without explaining why Warnke’s experiences are irrelevant or inadequate, or why his experiences are too dissimilar or too general, to permit him to testify.

    The Court concluded that Warnke’s experience was sufficient for him to testify citing his extensive experience with warehouse operations and involvement in starting two warehouses. Plaintiffs were free to impeach Warnke by pointing out the details of his experience and arguing to the jury that his testimony should not be credited.

    Plaintiffs also pressed for the exclusion of some of the opinions in Warnke’s supplemental report dated October 17, 2023. Warnke’s supplemental report contained nine “responsive opinions” that were intended to address opinions offered by Plaintiffs’ expert, Robert Handfield. Plaintiffs argued that Warnke’s third and ninth responsive opinions were improper legal opinions.

    Warnke’s third responsive opinion was regarding the expiration of the Services Agreement that originally governed the parties’ relationship. Evidence in the Record suggested the parties’ performance continued after the Services Agreement expired. In Count I, Plaintiffs alleged Defendant breached both the Services Agreement and an implied agreement formed after the Services Agreement expired. In denying summary judgment, the Court concluded the jury would have to (1) decide if the parties had an implied agreement that continued after the Services Agreement expired and (2) ascertain the terms of any implied agreement it found was created. Warnke’s third responsive opinion stated his view regarding whether the parties agreed to certain terms after the Services Agreement expired, and to that extent, Plaintiffs argued it allegedly constituted a legal opinion that Warnke could not offer. However, within that discussion, Warnke opined that “[t]he industry does not view the WRC KPI ranges ranges as default KPIs if a customer and 3PL cannot agree.” This opinion (1) depended on Warnke’s expertise about industry standards and practices, (2) was not based on legal considerations, and (3) corresponded to Handfield’s contrary opinion, which the Court held (in a separate Order) was admissible. Accordingly, Warnke was allowed to testify about this aspect of his third responsive opinion.

    In his ninth responsive opinion, Warnke disagreed with Handfield that it was reasonable for Defendant to refuse to pay Plaintiffs’ invoices. The Court had struck Handfield’s opinions on the topic, and it struck Warnke’s ninth responsive opinion for the same reasons.

    In his supplemental report, Warnke offered his view of a lawsuit in which Schnucks sued Defendant and drew conclusions about the similarities between the circumstances giving rise to the two lawsuits and the implications of the outcome for this case. Plaintiffs argued this was improper because Warnke was not a lawyer and had no legal training. Defendant pointed out that Warnke explicitly stated his opinion responded to paragraph 120 in Handfield’s report, in which Handfield provided similar opinions and concluded this case and the Schnucks case were similar. Defendant contended that if Handfield could testify about the Schnucks case, then so could Warnke. In their Reply Suggestions, Plaintiffs incorrectly contended Defendant did not dispute that Warnke’s opinion was inadmissible. In the absence of an argument to the contrary, the Court agreed with Defendant: if Handfield opined about the Schnucks case, then so could Warnke.

    Plaintiffs identified three instances in which they believed Warnke impermissibly testified about a party’s intent or state of mind and asked the Court to exclude such opinions. The first instance appeared in the Summary and Conclusions section of Warnke’s report, where he opined that Plaintiffs “had a clear priority and direction to implement the Tracy, California facility on a strict timeline in spite of delays and their resultant effects, and Plaintiffs did not waiver or consider alternatives or contingencies.” The Court found that this statement merely described the instructions Plaintiffs gave to Defendant and did not say anything about either party’s intent or state of mind. Moreover, as a summary or conclusion, the statement was based on the remaining portions of the Report where the parties’ actions were set forth in greater detail.

    The second instance appeared in Warnke’s supplemental report, where he (1) observed a witness (G. Schlangen) testified that Defendant “remained committed to the relationship with Plaintiffs and was driving further improvements” and (2) “agreed” with Schlangen that Defendant “remained committed to the business relationship throughout its management” of the warehouse. Later, he opined that it was “a credit to Defendant that they remained committed to the operation while not being paid.” Defendant contended this testimony simply recounted Schlangen’s testimony. An expert could rely on witness testimony to support opinions within his area of expertise. Warnke mentioned Schlangen’s testimony to support his opinion that Schlangen was truthful, but the Court found that the opinion was not based on Warnke’s expertise and instead vouched for Schlangen’s truthfulness – which was clearly impermissible. Thus, it was held that Warnke could not testify that he agreed with Schlangen’s statement – and, because he could not testify that he agreed with the statement, he could not then testify that he believed Defendant should be credited for remaining committed to the project. And, given that Warnke could not offer those opinions, there remained no reason for him to recount Schlangen’s testimony.

    Finally, at his deposition, Warnke testified that Defendant “did their level-headed best . . . to operate” and improve the warehouse. As demonstrated by the context, the Court held that this was not an opinion about Defendant’s state of mind or intent; instead, it was a conclusion based on Warnke’s consideration of Defendant’s attempts to make the warehouse operational.

    The Court upheld the inadmissibility of the second of the three instances in which the Plaintiffs believed Warnke impermissibly testified about a party’s intent or state of mind.

    Held

    The Plaintiff’s motion to exclude some of Defendant’s expert Dale Warnke’s opinions was granted in part and denied in part by the Court.

    The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.

    Key Takeaways:

    The qualifications and expertise of an expert witness play a crucial role in determining the admissibility of their opinions. Despite some challenges to Warnke’s experience, the Court deemed his extensive background in warehouse operations and logistics, though not specifically tailored to the industry in question, as sufficient for him to provide testimony. Second, it’s essential that expert testimony remains within the scope of the witness’s expertise. Warnke was allowed to testify about industry standards and practices related to warehouse operations, as it fell within his area of knowledge. Finally, experts should refrain from offering legal opinions or vouching for witness truthfulness unless directly related to their expertise. The Court excluded certain opinions from Warnke’s testimony that were deemed impermissible legal opinions. Moreover, the relevance and recency of an expert’s experience are factors to consider, but do not necessarily disqualify them from testifying. Warnke’s past involvement in starting warehouses, even if more than twenty years ago, was still considered relevant. Parties have the right to challenge expert testimony, and in this case, the Plaintiffs contested some of Warnke’s opinions, leading to the court’s decision on their admissibility. Ultimately, the admissibility of expert testimony rests with the court, which considers various factors such as relevance, reliability, and the qualifications of the expert witness. The Court carefully weighed these factors in determining which opinions from Warnke were admissible.

    Case Details:

    Case Caption: Lindt & Sprungli (North America), Inc. Et Al V. Gxo Warehouse Company
    Docket Number: 4:22cv384
    Court: United States District Court, Missouri Western
    Citation: 2024 U.S. Dist. LEXIS 37911
    Order Date: February 22, 2024
  • Environmental Expert Witness barred from testifying about the Applicability of Asbestos National Emissions Standard for Hazardous Air Pollutants

    Environmental Expert Witness barred from testifying about the Applicability of Asbestos National Emissions Standard for Hazardous Air Pollutants

    This case involved two buildings in downtown Burley, Idaho, located at 1222 and 1226 Overland Avenue which burned in late January 2018 and were subsequently demolished in mid-February 2018. A small portion of the debris from the buildings was hauled away to a local gravel pit which also operated as a landfill. Rising concerns about the possible presence of asbestos in the building debris caused the work to cease. Testing at the demolition site after the buildings were demolished was why the presence of asbestos in some of the demolition debris was allegedly confirmed during a clean up by an EPA contractor some six months later. Therefore, the Government asserted that asbestos was present in the buildings before they were demolished. The charges in this case arose from the demolition and clean up of the buildings, which began on February 17, 2018. The fire that damaged the buildings occurred during the early morning hours of January 29, 2018. The cause of the fire was investigated by state and federal law enforcement. Arson was suspected because of circumstances surrounding the fires, including the discovery of an undetonated pipe bomb at the front door of a restaurant located directly across the street from the burned buildings. The presence of this pipe bomb necessitated the involvement of a bomb squad to render it safe. Various individuals were interviewed during the law enforcement investigation of the cause of the fire including Pilling and his former business partner, Brian Tibbets. Pilling and Tibbets were owners of the restaurant where the pipe bomb was found and both were thought to be owners of the Overland buildings that burned. For his part, Pilling was out of the country on a ski trip at the time of the fire. No one was ever criminally charged with causing the fire or for involvement with the pipe bomb found across the street. Pilling was charged by indictment on December 14, 2022, with seven criminal counts related to the demolition and cleanup of the buildings. The Clean Air Act (CAA) provided for criminal penalties if a person knowingly violated the National Emissions Standard for Hazardous Air Pollutants (“NESHAP”) for asbestos that governed the removal of asbestos as the result of demolition and renovation activities. Pilling was charged with failure to thoroughly inspect 1222 and 1226 Overland for asbestos before the demolition commenced (Count One), failure to notify the EPA ten days prior to the commencement of demolition activity (Count Two), failure to remove asbestos prior to demolition (Count Three), failure to have an on-site representative trained in compliance with asbestos work practices (Count Four), failure to adequately wet the asbestos before it was disposed of (Count Five), discharge of visible emissions to the outside air from asbestos-containing waste material (Count Six), and failure to deposit asbestos and components covered with asbestos as soon as practical in a disposal site authorized to accept asbestos (Count Seven).

    The parties have filed various motions in limine, all of which have been addressed by the Court.

    The Defendant filed a motion in limine seeking to exclude six categories of evidence of which the Government opposed the motion as to four of the following categories: (1) Evidence that arson caused the fire at the buildings located at 1222 and 1226 Overland Avenue in Burley, Idaho, in late January 2018, that the buildings caught fire under suspicious circumstances, that a pipe bomb was discovered, or any inference that Pilling was responsible for any of the foregoing; (2) Evidence of any other crime, wrong, or act” of Pilling, if any, pursuant to F.R.E. 404(b); (3) Evidence that asbestos, which was allegedly found in very limited amounts in the Overland buildings debris, is “deadly,” that it may bring on serious diseases, or that “no level of exposure is considered safe;”  and (4) Unsubstantiated belief or opinion held in the local community that Pilling was an “owner” of the buildings or demolition company.

    The Government also filed two motions in limine in response.
    The first motion sought to limit the scope of the Defendant’s cross-examination of Richard Martinez, a Government witness, while the second motion requested a ruling on the admission of certain expert testimony by John Pavitt.

    Chemistry Expert Witness

    Richard Martinez is a Chemist at the United States Environmental Protection Agency’s (EPA) National Enforcement Investigations Center (NEIC), where his areas of work included inorganic and organic chemical analyses and asbestos identification. Martinez has held this position since 2000. He previously held the position of Physical Science Technician at NEIC from 1994 to 2000. Martinez received his Bachelor of Sciences Degree in Biology from the University of Southern Colorado in 1990.

    Environmental Expert Witness

    John Pavitt is a Clean Air Act Inspector and Case Officer with the United States Environmental Protection Agency (“EPA”) and has held that position since 1993. He earned a Bachelor of Science degree in Environmental Studies from Western Washington University in 1986. He has training with respect to the collection of samples for asbestos analysis, and intimate knowledge of the regulations surrounding asbestos treatment and disposal.

    Discussion by the Court

    Defendant sought to prevent the Government from presenting evidence or suggesting that arson caused a fire in Burley, Idaho, in January 2018; the buildings caught fire under suspicious circumstances; a pipe bomb was discovered nearby; or that Defendant was responsible for it. Defendant argued that it was irrelevant and substantially outweighed by the considerations set forth in Rule 403. The Government responded by contending that it needed to provide a coherent and comprehensible story regarding the commission of the crime as well as context for its other evidence such as statements made by the Defendant during an interview with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) investigators, but it never intended to present evidence of alleged arson as other-act evidence under Rule 404(b). The Court ruled that the Government could not suggest or offer evidence of arson, discovery of a pipe bomb nearby, suspicious circumstances surrounding the fire, or the Defendant’s involvement in it. However, the Government was permitted to briefly explain the context of the interview with ATF agents without implying any connection to the fire or suspicious circumstances.

    The Defendant also sought to prevent the Government from offering evidence that asbestos is “deadly,” that it may cause serious diseases, and that “no level of exposure is considered safe.” The Government responded that the dangerousness of asbestos was relevant to the Defendant’s motive for not undertaking proper abatement and demolition measures. The Court held that the dangers of asbestos inhalation were not relevant to any element of the charged offenses. And, to the extent, that those dangers may have been indirectly relevant to the Defendant’s alleged motive, that relevance was substantially outweighed by the undue delay and unfair prejudice that would have accompanied the presentation of such evidence.

    The Defendant sought to exclude evidence of any “unsubstantiated belief or opinion” held in the “local community” about his ownership of the buildings or demolition company. He argued that such “speculative” and “uninformed” testimony would be irrelevant and unfairly prejudicial. In response, the Government explained that it would not offer any “unsubstantiated” beliefs or opinions of community members, but it did intend to introduce an email from the Defendant’s father to the Defendant which ostensibly revealed the father’s belief that the Defendant owned the buildings.

    At first blush, evidence indicating that the Defendant’s father believed the Defendant to be an owner of the buildings did not appear relevant to whether he actually was an owner. However, the Court observed that both parties indicated that the Defendant’s alleged ownership of the buildings and demolition company would be a key issue at trial. And, to the extent that the direct evidence bearing on ownership was inconclusive, evidence of the father’s belief may have had probative value as circumstantial evidence. Moreover, whatever prejudice that evidence may have had against the Defendant would not have been unfair considering the defense counsel would have the opportunity to challenge the weight of the evidence.

    Accordingly, the Court agreed to allow the Government to offer evidence indicating that the Defendant’s father believed the Defendant to be the owner of the buildings.

    As for the motions in limine filed by the Government, the Government sought to prevent the Defendant from cross-examining Richard Martinez, who analyzed samples for asbestos content in this case.

    In 2020, Martinez was suspended from work for five days in connection with failures in his duties as a Waste Control Officer at the NEIC. Following a related investigation, the EPA Office of Inspector General (OIG) issued a report (the “OIG Report”) addressing “Staffing Constraints, Safety and Health Concerns” at the NEIC laboratory. And, in June of 2023, the EPA’s Office of Criminal Enforcement, Forensics and Training Professional Integrity and Quality Assurance (PIQA) disclosed a summary of a statement (the “PIQA Statement”) that Martinez made to investigators about his suspension and the matters addressed in the OIG Report. The PIQA Statement primarily focused on waste-handling concerns at the NEIC but included one reference to the NEIC’s “failing asbestos program.”

    According to the Government, anything related to Martinez’s suspension, the OIG Report, and the PIQA Statement were irrelevant and did not implicate Martinez’s character for truthfulness. The Defendant responded by arguing that all three subjects were relevant. Namely, the suspension bore on Martinez’s expert qualifications and reliability, and the OIG Report and PIQA Statement reflected the “state of affairs at the NEIC at the time of its involvement in this case.”

    The Court held that Martinez’s suspension arguably bore on the reliability of his expert testimony yet how much weight to give, or not give, the Defendant’s credibility challenges was the jury’s call. The Court noted that Martinez was suspended for his duty-related failures while employed at the NEIC, and that the fact of his suspension did appear to have some tendency to discredit his performance of other job duties, such as testing asbestos content.

    The Court, based on the information now available to it, decided that the OIG Report and PIQA Statement addressed largely—if not entirely—unrelated concerns about the NEIC’s waste-disposal program and that the Report and Statement were irrelevant and off-limits on cross-examination to the extent it was true.

    The Court determined that the OIG Report and PIQA Statement were fair game on cross-examination to the extent they addressed problems (1) at the NEIC testing facility and (2) within the asbestos program.

    The Government also argued that Federal Rules of Evidence 404(a)(1) and 404(b)(1) precluded the Defendant from cross-examining Martinez about his prior suspension. Those rules barred the use of character and other act evidence to prove that a person acted in accordance with a certain character trait on a particular occasion. The Court held that the evidence of the suspension was not being offered to prove the witness’s character, but instead to rebut the Government’s representation of Martinez as a reliable expert whose testimony should be given special weight in light of his experience and expertise.

    Next, the Government sought to introduce Pavitt as a “regulatory expert” in order to “orient the jury as to the ‘requirements of federal regulations and what routine practices’ of the regulated community should be ‘according to the regulations.” Pavitt was hired to (1) Explain that the Clean Air Act regulates the handling and removal of asbestos through NESHAP; (2) Explain “the applicability of the asbestos NESHAP;” (3) Provide and explain the regulatory definitions of various terms, such as “facility component,” “owner or operator of a demolition or renovation activity,” “demolition,” “facility,” “regulated asbestos-containing material,” “friable asbestos material,” and “waste generator;” and (4) Explain “what the work practice standards required.”

    Defendant objected that Pavitt’s proposed testimony consisted of legal conclusions, usurped the Court’s role of instructing the jury, usurped the jury’s role of applying the law to the facts, was unhelpful, and created a risk of confusing the jury.

    The Court held that Pavitt may not opine on the applicability of the asbestos NESHAP, what he believes the work practice standards require, or what he believes owners and operators “should” do to comply with those requirements because opinions about the applicability and meaning of the requirements constitute “legal conclusions.” Moreover, testimony about what owners and operators “should” do to comply with the requirements would also invade the province of the jury to apply the law to the facts. The Court observed that allowing Pavitt to explain when the legal requirements apply and what they require would create a risk of juror confusion, were the witness’s interpretation or description to differ in any respect from the Court’s final instructions.

    Pavitt was, however, allowed to explain technical terms and concepts within the regulations that were likely unfamiliar to the jury and that were pertinent to his testimony considering the asbestos work practice standards contained several technical terms that are likely unfamiliar to the average juror.

    The Court held that Pavitt will be allowed to explain the meaning of technical terms used in the NESHAP to the extent it is necessary for the jury to understand his testimony but will not be allowed to interpret ordinary terms that the average juror is likely to understand.

    Held

    The Defendant’s motion in limine to exclude evidence related to the cause of the fire, evidence related to the dangers of asbestos and beliefs and opinions about ownership of the buildings and demolition company was granted in part and denied in part by the Court. Both the motions in limine filed by the Government to limit cross-examination of EPA Witness and introduce regulatory expert testimony was, once again, granted in part and denied in part by the Court.

    Key Takeaways:

    Key takeaways regarding expert testimony include ensuring its relevance to the case, with a focus on addressing pertinent issues and clarifying complex matters for the jury. Challenges to expert qualifications and reliability are admissible, particularly concerning incidents in their professional history that may impact credibility. Limitations exist on the scope of expert testimony, notably restricting it from offering legal conclusions or assuming the role of the court or jury in interpreting and applying the law. Clarity is essential to avoid confusing the jury, with technical terms explained as needed, while overly complex or confusing testimony risks being excluded. Courts balance the probative value of expert testimony against the risk of prejudice, confusion, or misleading the jury, potentially excluding irrelevant or confusing testimony. Ultimately, the jury decides the weight and credibility of expert testimony, applying the law to the facts presented in the case.

    Case Details:

    Case Caption: United States v. Pilling
    Docket Number: 4:22cr282
    Court: United States District Court for the District of Idaho
    Citation: 2024 U.S. Dist. LEXIS 36564
    Order Date: March 01, 2024

  • Reliability of Frequent Location History Data held to be Insufficiently Established

    Reliability of Frequent Location History Data held to be Insufficiently Established

    The Commonwealth alleged that at around 10:51 A.M. on March 31, 2015, the Defendant, a cooperating witness, and Jeromie Johnson participated in a home invasion on Harvard Street in the Dorchester section of Boston. Richard Long, Yvette O’Brien, and O’Brien’s newborn son were at home at the time of the attack. Johnson and the Defendant bound Long and O’Brien with electrical cords, cut Long with a knife, and shot both Long and O’Brien in the head. They then set fire to the house. Long died from his wounds. O’Brien survived the gunshot wound and could describe the events that occurred in the apartment until she was shot in the head, but she was unable to identify the perpetrators. The cooperating witness agreed to testify against the Defendant in exchange for facing reduced charges. The Commonwealth asserted that the cooperating witness would identify the perpetrators and their roles in the home invasion and associated crimes. The Defendant allegedly drove to the crime scene in a white sedan rented by his girlfriend for his use. The Defendant’s car was captured on video being driven down Blue Hill Avenue in Dorchester, with another car carrying Johnson and the cooperating witness following behind. The Defendant’s car was next seen parked on Paxton Street near the scene of the crime. At 10:44 A.M., the Defendant received a call from Johnson lasting over three minutes, and the Defendant called Johnson several times over the next few minutes with no answer. The Defendant’s telephone utilized a cell tower the coverage area of which included the crime scene for these calls. A video camera at a Department of Youth Services facility located across the street from the crime scene captured grainy video footage of two people approaching the victims’ home at 10:51 A.M., and the same video camera captured footage of three people leaving at 11:20 A.M. The Defendant’s car was captured on video at 11:22 A.M. being driven down Blue Hill Avenue.

    Prosecuting the Defendant for murder in the first degree and other crimes related to the home invasion, the Commonwealth moved in limine to permit the introduction at trial of frequent location history (FLH) data retrieved from the Defendant’s cell phone, an Apple iPhone 6.

    When turned on, an iPhone generated location data points from sources such as global positioning system (GPS) data, nearby wireless computer network (Wi-Fi) access points, short-range wireless Bluetooth connections, and cell site location information (CSLI). These location data points were stored on the iPhone’s “Encrypted B” cache for between twenty-four and forty-eight hours. In 2015, an algorithm on the iPhone would use these data points to create FLH data. The FLH data created by the algorithm consisted of a longitude and latitude coordinate point and a circle around it, representing an amalgamation of the location data points. The radius of the circle, labeled the “uncertainty” in the FLH data, represented the approximate area in which the cell phone was located. The uncertainty radius could change from visit to visit to a frequent location, as could the coordinate point representing the center of the frequent location. FLH data also provided an estimated time that the iPhone entered the location, and an estimated time the iPhone left the location. The algorithm used to convert location data points into FLH data was proprietary, and thus the Commonwealth’s expert did not have access to the algorithm itself during his testing of FLH data reliability. Moreover, it was unclear how the algorithm processed, or weighed, the different location data points generated by the iPhone.

    In 2022, a full-file system extraction was performed on the Defendant’s cell phone. This extraction allowed the Commonwealth to access encrypted files on the cell phone, including its FLH data. The FLH data on the cell phone listed 345 frequent location visits. Of particular interest to the Commonwealth was frequent location no. 58. Frequent location no. 58 was centered on coordinates corresponding to a Harvard Street address near the victims’ home. The uncertainty radius of frequent location no. 58 was forty-three meters, or 143 feet, which encompassed the crime scene. The Commonwealth’s proffered expert on FLH data, a senior crime analyst in the office of the district attorney for the Suffolk district (analyst), testified that he interpreted the FLH data retrieved from the Defendant’s cell phone to show that the phone entered the area represented in frequent location no. 58 at 10:36 A.M. on March 31, 2015, and left the area at 11:22 A.M. that day. The Commonwealth therefore contended that the proffered expert testimony on FLH data, if admitted, would corroborate the cooperating witness’s testimony placing the Defendant at the scene of the home invasion.

    On September 11, 2023, the trial judge denied the Commonwealth’s motion to permit the introduction of FLH evidence at trial. On the same day, the Commonwealth filed a notice of appeal, believing that the notice of appeal would stay the trial court proceedings pursuant to Mass. R. Crim. P. 15 (e), as appearing in 474 Mass. 1501 (2016). The Defendant filed a response, arguing that the Commonwealth’s notice of appeal did not automatically stay the trial court proceedings. Specifically, the Defendant argued that the appeal procedures in rule 15 were inapplicable, and that the Commonwealth’s only avenue for interlocutory review of the denial of a motion in limine was a petition under G. L. c. 211, § 3, which, in turn, did not automatically stay the trial court proceedings. The trial judge concluded that the Commonwealth’s appeal was outside the scope of rule 15, but nonetheless stayed the proceedings to allow the Commonwealth to pursue relief through a G. L. c. 211, § 3, petition. A single justice of this Court then extended the stay and subsequently reserved and reported the case to the full court, including both the procedural question of whether this appeal was within the scope of rule 15 and the merits of whether the trial judge abused his discretion in denying the Commonwealth’s motion to permit the introduction of FLH data.

    Discussion by the Court

    As a preliminary issue, the parties disagreed as to whether the Commonwealth may appeal from the denial of its motion to admit expert testimony under Mass. R. Crim. P. 15 (a) (2), as appearing in 474 Mass. 1501 (2016) (rule 15 [a] [2]), or whether its sole avenue for interlocutory review was a petition under G. L. c. 211, § 3.

    The text of rule 15 (a) (2) provided for interlocutory appeal from “an order determining a motion to suppress evidence prior to trial.” By its express terms, rule 15 (a) (2) “did not encompass other interlocutory rulings, in part for sound reasons of judicial economy, as such ‘rulings were subject to change when the case unfolds.” Although the text of rule 15 (a) (2) was directed only at motions to suppress, a narrow exception to this general rule was allowed: “if a motion to exclude all or most of the Commonwealth’s incriminating evidence is allowed, and if, as a practical matter, that ruling (if permitted to stand) would terminate the prosecution, the Commonwealth may seek leave to appeal pursuant to [rule 15 (a) (2)].”

    The Commonwealth suggested that rule 15(a)(2) should be interpreted more broadly to encompass other situations where “critical” evidence is excluded, even where the evidence excluded does not have the practical effect of terminating the criminal proceeding. The Commonwealth thus proposed that, although the exclusion of its expert’s testimony did not prevent it from introducing all or most of its incriminating evidence at trial, the instant appeal was properly brought under rule 15(a)(2) because the expert’s testimony regarding FLH data was “critical” to the case against the Defendant. Because its case at trial relied significantly on testimony by a cooperating witness procured in exchange for a reduced sentence, the Court agreed with the Commonwealth that evidence corroborating the cooperating witness’s testimony (and, thus, bolstering the credibility of that testimony) might fairly be described as “critical” to the prosecution’s case. Nonetheless, the Commonwealth’s invitation to expand the scope of rule 15(a)(2) to include the ruling on the motion in limine in the instant case was declined by the Court. The plain text of rule 15(a)(2) referred only to motions to suppress and thus set out the general rule.

    The Court determined that the Commonwealth’s avenue for interlocutory review of the ruling was a petition for extraordinary relief under G. L. c. 211, § 3, rather than an interlocutory appeal under rule 15 (a) (2).

    As for whether the trial court abused its discretion in holding the Commonwealth’s failure to establish the reliability of FLH data, the Court stated that when proposed expert testimony uses a new theory, or new methodology to apply an accepted theory, the proponent must establish its reliability using a Daubert-Lanigan analysis.

    When considering a motion to introduce expert testimony, a judge should initially consider five nonexclusive factors in determining the reliability of proposed scientific evidence:”whether the scientific theory or process (1) has been generally accepted in the relevant scientific community; (2) has been, or can be, subjected to testing; (3) has been subjected to peer review and publication; (4) has an unacceptably high known or potential rate of error; and (5) is governed by recognized standards.” Under the Daubert-Lanigan standard, “the judge, acting as gatekeeper, is responsible for making a preliminary assessment whether the theory or methodology underlying the proposed testimony is sufficiently reliable to reach the trier of fact.”

    As an initial matter, the Commonwealth contended that the trial judge erred in identifying the relevant field of expertise as cellular technology, rather than digital forensics. It claimed that this error evidenced a misunderstanding of FLH data and contributed to the trial judge’s erroneous conclusion that the analyst was not qualified to testify as an expert on FLH data. Contrary to these claims, it was declared on appeal that the trial judge correctly understood the analyst’s testimony on FLH data, and the relevant required expertise, and decided the pertinent issue: whether the Commonwealth had met its burden of establishing the reliability, under the Daubert-Lanigan standard, of FLH data.

    Regarding the first Daubert-Lanigan factor, general acceptance by the relevant scientific community, the trial judge found that the primary evidence in support of general acceptance was the analyst’s conclusory testimony to that effect, which, as the trial judge noted, was not well supported by the evidence in the record. The articles submitted in evidence by the Commonwealth in support of the analyst’s testimony largely discussed the technology that produced the location data points used as inputs by the FLH algorithm to output FLH data and instead of discussing the reliability of the FLH data themselves. The analyst identified two digital forensics experts whose writing he claimed supported his conclusion that FLH data had been deemed reliable by the scientific community, yet Commonwealth neglected to submit articles by these authors in evidence. Accordingly, it was noted on appeal that the trial judge did not abuse his discretion in concluding that the Commonwealth failed to meet its burden of showing by a preponderance of the evidence that FLH data had been generally accepted as reliable by the scientific community.

    When Commonwealth argued that because the FLH algorithm used as its inputs location data sources generally regarded as reliable (such as GPS, CSLI, and Wi-Fi location data), it meant that the FLH data output by the algorithm consequently was also generally regarded as reliable. The Court, however, held that even if the inputs used by the FLH algorithm were generally deemed reliable, the FLH data outputs were not ipso facto reliable, especially given the lack of scientific literature or adequate testing to support reliability.

    As for the second Daubert-Lanigan factor, whether the technology can be or has been tested, it was held that the trial judge did not abuse his discretion in holding that there was not sufficient testing to establish the reliability of FLH data. The trial judge found that the analyst’s experiments with FLH data had a small sample size. The analyst conducted tests of FLH data reliability using a “jailbroken”iPhone (test iPhone) that was similar, but not identical, to the iPhone associated with the Defendant. In other words, to test the reliability of FLH data, the analyst jailbroke an iPhone 5C, which allowed him access to information that is ordinarily encrypted and inaccessible to an iPhone user. He brought the jailbroken iPhone to five different locations, examined the underlying location data points gathered by the iPhone at those locations from sources such as CSLI, Wi-Fi, and GPS, and compared these underlying location data points to the FLH data outputs produced on those locations. The analyst visited each of the five locations two or three times, for a total of twelve  experiments. Despite his testing, the analyst did not know the algorithm used in creating FLH data and did not know how various factors were weighed to create FLH data outputs. The analyst also could not explain how the uncertainty radius for a frequent location was determined. He was able to identify that the uncertainty radius and center coordinate point for a frequent location could change with each visit to that location, but he was unable to explain why the uncertainty radius for a frequent location changed or whether data from previous visits contributed to how FLH data changed after a subsequent visit to the location. Moreover, while the FLH data for some locations included a “confidence level,” the analyst could not explain what the confidence level meant, why some locations had a confidence level and others did not, or how the confidence level was calculated.

    The Commonwealth also argued that the trial judge abused his discretion by failing to make findings regarding evidence that certain frequent location visits identified on the Defendant’s cell phone were corroborated by other data on the phone. The Commonwealth asserted that the data corroborating the frequent location data bolstered the analyst’s testing as evidence that FLH data are reliable. For example, the analyst testified that frequent location no. 73 on the Defendant’s cell phone corresponded to a location at a mall in Newton. The FLH data suggested that the cell phone was at frequent location no. 73 from 7:26 P.M. to 7:32 P.M. on March 29, 2015, two days before the murder. The uncertainty radius for frequent location no. 73 was ninety-one meters, meaning the FLH data represented that the cell phone was likely within a ninety-one meter radius of the determined center point for location no. 73. Two images recovered from the Defendant’s cell phone were taken at 7:31 P.M. and 7:32 P.M. on March 29, and appeared to have been taken in the northwest corner of the mall parking garage. The Commonwealth suggested that the pictures corroborated the reliability of frequent location no. 73 because they placed the Defendant near the location during the relevant time. The analyst testified regarding four other frequent locations extracted from the Defendant’s cell phone that were corroborated either by pictures taken on the phone indicating it was in the area of the frequent location during the relevant time period, or by data showing the phone connected to Wi-Fi networks associated with a location while the FLH data indicated the phone was at the location.

    It was held on appeal that even if evidence of the five corroborated locations were considered alongside the twelve experiments conducted by the analyst, it was well within the trial judge’s discretion to hold that the Commonwealth had not met its burden of showing that FLH data had been sufficiently tested to show its reliability. To sum it up, judges were not required to make explicit findings on all the evidence presented at a hearing.

    As for whether the trial judge abused his discretion in his discussion of the other Daubert-Lanigan factors of whether FLH data evidence (3) had been subjected to peer review and publication; (4) had an unacceptably high known or potential rate of error; and (5) was governed by recognized standards, it was observed that the testing of FLH data performed by the analyst was neither peer-reviewed nor published. In terms of other publications, the trial judge found that the articles and materials submitted by  the Commonwealth discussing the underlying technology (GPS, Wi-Fi, and CSLI) were not “particularly instructive.” He also noted that there were “very few references to FLH in any of the papers submitted into evidence.”

    The trial judge held that the fifth prong of Daubert-Lanigan, recognized standards, was satisfied by the existence and admission in evidence of Federal regulations setting standards for analyzing cell phone location information generally. The Commonwealth argued on appeal that because Federal regulations existed for cell phone location information and were in effect at the time of the murder, the fourth prong, known or potential rate of error was sufficiently met. The Commonwealth did not otherwise provide any evidence or argument as to why the trial judge erred in holding that it had failed to meet its burden on the fourth prong. No abuse of discretion was observed by the trial judge on appeal when it was held that the fourth prong had not been met, particularly because of the various characteristics of FLH data that the analyst could not explain, including the uncertainty radius and confidence level.

    Held

    Because the challenged evidentiary ruling involved neither the determination of a motion to suppress nor the pretrial exclusion pursuant to a motion in limine of evidence that, as a practical matter, would terminate the Commonwealth’s prosecution of the Defendant, it was held on appeal that the Commonwealth’s avenue for interlocutory review of the ruling was a petition for extraordinary relief under G. L. c. 211, § 3, rather than an interlocutory appeal under Rule 15 (a) (2). Moreover, having considered the merits of the Commonwealth’s petition, it was concluded that the trial judge did not abuse his discretion in denying the Commonwealth’s motion in limine to admit the  proffered expert testimony regarding the FLH data. Accordingly, the case was remanded to the county court for entry of a judgment affirming the trial court judge’s order and remanding the matter to the trial court for further proceedings consistent with this opinion.

    Key Takeaways:

    The trial judge found that the Commonwealth did not adequately demonstrate the general acceptance of FLH (frequent location history) data as reliable by the scientific community. Despite arguments from the Commonwealth, including testimony from an analyst, the evidence presented was deemed insufficient to establish widespread acceptance of FLH data’s reliability. Additionally, the Court held that there was not enough testing to establish the reliability of FLH data outputs. The analyst’s experiments were criticized for their small sample size and lack of understanding of the algorithm used to generate FLH data. The Commonwealth also argued that certain frequent location visits identified on the Defendant’s cell phone were corroborated by other data, such as pictures taken on the phone or data showing the phone connecting to Wi-Fi networks associated with a location. However, the Court determined that this evidence, when considered alongside the analyst’s experiments, did not sufficiently demonstrate the reliability of FLH data. The Court assessed the case against the Daubert-Lanigan factors, including peer review, potential rate of error, and recognized standards. Lack of peer review and publication, as well as unanswered questions regarding the reliability of FLH data, contributed to the court’s decision. While Federal regulations existed for analyzing cell phone location information, the Court held that the Commonwealth failed to meet its burden in demonstrating that FLH data met recognized standards. Overall, this case underscores the importance of rigorous testing, peer review, and adherence to recognized standards in establishing the reliability of expert testimony, particularly in cases involving complex technological evidence.

    Case Details:

    Case Caption: Commonwealth v. Arrington
    Docket Number: SJC-13499
    Court: Massachusetts Supreme Judicial Court
    Citation: SJC-13499 (Mass. Feb. 20, 2024)
    Order Date: Feb 20, 2024
  • Consumer Confusion Survey Conducted by Survey Research Expert Witness held to be based on a Reliable Methodology

    Consumer Confusion Survey Conducted by Survey Research Expert Witness held to be based on a Reliable Methodology

    Plaintiffs, Lincare Holdings Inc.’s and Lincare Licensing Inc.’s (collectively “Lincare”) are national health care companies that provide patients “with top quality treatments and durable medical equipment.” Plaintiffs’ “portfolio includes healthcare goods and services offered in connection with the trademarks LINCARE, mdINR, CONVACARE, AMERICAN HOMEPATIENT, PREFERRED HOMECARE, and the trade name SPECIALIZED MEDICAL SERVICES.” Defendant Doxo, Inc. (“Doxo”) runs an all-inone bill pay service that allows users to pay bills to over 120,000 billers using Doxo’s website. Doxo, although unaffiliated with Plaintiffs, included Plaintiffs as billers that can be paid through Doxo’s website. Doxo’s biller pages for Plaintiffs included the use of Plaintiffs’ trademarks and trade name. Plaintiffs initiated this action against Doxo on October 13, 2022, asserting claims for trademark and service mark infringement in violation of Section 32 of the Lanham Act (Count 1); false representation and false designation of origin in violation of Section 43(a) of the Lanham Act (Count 2); unfair competition in violation of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”) (Count 3); trademark infringement, trade name infringement, and unfair competition under Florida common law (Count 4); and tortious interference with business relationships (Count 5).

    Doxo accused Lincare of attempting to use several forms of inadmissible
    evidence as a result of which Doxo sought to exclude (1) Lincare’s various call logs prepared by its customer support agents, which constituted unreliable, inadmissible, and often multilayered hearsay, (2) all evidence of, or testimony relating to, cease and desist letters sent to Doxo by third-party billers, as well as any third-party complaints or disputes that involve marks not at issue here and were not fully adjudicated as well as (3) Sarah Butler’s testimony regarding Lincare’s trademarks other than LINCARE.

    Survey Research Expert Witness

    Sarah Butler is a highly esteemed expert in survey research and sampling, boasting over 20 years of experience in designing and executing intricate consulting projects for clients involved in litigation, arbitration, regulatory proceedings, and business strategy. Her expertise extends to advising prominent brands such as Apple, Walmart, Toyota, and Gatorade. Notably, her research and testimony have been widely recognized and accepted in both state and federal courts, including bench and jury trials, as well as by regulatory bodies like the ITC and the Copyright Board, along with arbitration venues.

    Discussion by the Court

    First, Doxo argued that the Court should exclude Lincare’s various call logs prepared by its customer support agents since the call logs were neither recordings nor verbatim transcriptions of actual words spoken by Lincare’s customers. Instead, they reflected the employees’ characterizations of the conversation, biased by the employees’ express instructions from their superiors to uncover evidence of confusion in support of this case.

    The Court observed that the call logs/notes consisted of two layers of statements: (1) the notes written by Plaintiffs’ customer representatives, for which the customer representatives are the declarants; and (2) the statements of Plaintiffs’ customers made to and recorded by the customer representatives, for which the customers are the declarants. Under Federal Rule of Evidence 805, “hearsay within hearsay is not excluded by the rule against hearsay if each part of the combined statements conforms with an exception to the rule.”  Thus, both layers of double hearsay must satisfy a hearsay exception to be admissible. Alternatively, there would be no hearsay within hearsay problem if the customers’ statements recorded within the notes did not constitute hearsay.

    The Court agreed with Plaintiffs that the customers’ statements to Plaintiffs’ customer representatives were not hearsay or were subject to the state of mind exception to hearsay.

    Next, Doxo argued that the evidence of cease and desist letters sent to Doxo by third-party billers, as well as any third-party complaints or disputes that involved marks not at issue here and were not fully adjudicated were irrelevant because “documents specific to one trademark are largely irrelevant to a claim for infringement of an entirely separate mark.” Additionally, Doxo maintained that mere complaints by third parties about alleged infringement were not relevant to the willfulness of Doxo’s infringement.

    The Court held that the letters were relevant to Doxo’s intent, bad faith, and willfulness in using Plaintiffs’ trademarks since the cease-and-desist letters and other third-party disputes put Doxo on notice that other businesses believed that Doxo’s use of their trademarks on its website infringed their trademarks. But — as Plaintiffs tell it — Doxo continued to prominently use various businesses’ trademarks, including Plaintiffs’ trademarks, on its website in the same way despite this notice.

    Finally, Doxo contended that Plaintiffs’ survey expert, Sarah Butler, should not have been able to offer opinions regarding Plaintiffs’ trademarks besides the LINCARE mark. It emphasized that Butler’s survey only involved the LINCARE mark and, thus, her opinion stated in her report that there was “no reason to believe [that her] conclusions as to confusion would differ for” Plaintiffs’ other marks should not have been admissible. The Court held that Doxo neglected addressing the Federal Rules of Evidence in support of this section of its
    Motion. Instead, Doxo cited law regarding expert reports and at least one case deciding a Daubert motion rather than a motion in limine.

    It was worth noting that Doxo had previously filed a Daubert motion targeting Butler’s testimony. When Butler had described the consumer confusion survey she conducted for the LINCARE mark, Doxo had argued that her opinions lacked reliable methodology. Doxo alleged that Butler’s survey consisted of numerous flaws concerning the survey population, the marketplace conditions, the control group, and the allegedly vague questions asked. The Court denied Doxo’s Daubert motion after acknowledging that Butler’s methodology in conducting her survey was reliable enough for it to be presented to the jury.

    The Court determined that to the extent Doxo could be interpreted as raising a challenge to the admissibility of Butler’s opinion under the Federal Rules of Evidence, that challenge likewise failed. Butler’s opinion regarding these trademarks was held to be relevant to the trademark infringement claims and exclusion under Rule 403 was unwarranted. Doxo was free to cross-examine Butler and raise arguments at trial about the weight to be accorded to her opinions.

    Held

    The Court denied the Defendant’s motions in limine to exclude Lincare’s unreliable call log, evidence regarding third-party disputes, and Sarah Butler’s testimony regarding Lincare’s trademarks other than LINCARE.

    The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.

    Key Takeaways:

    Regardless of the challenges to Sarah Butler’s methodology in a Daubert motion, the Court ultimately deemed her survey reliable enough for presentation to the jury, emphasizing the importance of demonstrating methodological soundness in expert opinions. Additionally, arguments regarding the scope of expert opinions were addressed, with the Court dismissing Doxo’s contention that Butler should only offer opinions on the LINCARE mark as unsupported by relevant legal standards. The Court emphasized the importance of applying the Federal Rules of Evidence and relevant legal standards in evaluating the admissibility and scope of expert testimony to ensure consistency and fairness across cases. Vigorous cross-examination — rather than exclusion — was advocated as the proper means of challenging Butler’s opinions

    Case Details:

    Case Caption: Lincare Holdings Inc. Et Al V. Doxo, Inc.
    Docket Number: 8:22cv2349
    Court: United States District Court, Florida Middle
    Citation: 2024 U.S. Dist. LEXIS 34899
    Order Date: February 29, 2024

  • Mortgage Expert Witness’ Statements regarding TILA Rescission Held to Amount to a Legal Conclusion

    Mortgage Expert Witness’ Statements regarding TILA Rescission Held to Amount to a Legal Conclusion

    This case involved claims under the federal Truth in Lending Act (“TILA”) regarding alleged errors in a loan arranged between Plaintiff and Defendant, as well as claims of slander of title, quiet title, and wrongful foreclosure. Beginning in 2006, Plaintiff owned residential property in Sandy, Utah (the “Property”). Defendant Veritas Funding, LLC is a mortgage lending company based in Midvale, Utah. On June 11, 2018, Plaintiff obtained a Fannie Mae Homestyle Renovation Loan for $370,500.00 from Defendant to remodel the Property, funding the loan by executing a deed of trust.

    Plaintiff had stopped making loan payments to Veritas in February 2020, claiming that Defendant’s lending process “was fraught with continual material disclosure errors.” Plaintiff sent a Notice of Rescission to Defendant on May 13, 2020, recorded with the Salt Lake County Recorder’s Office on June 18, 2020. On April 16, 2021, Defendant entered a Notice of Default and Election to Sell the Property (“Default”) and served the notice to Plaintiff. Plaintiff had until July 16, 2021, to cure the Default.

    Plaintiff brought this action on May 31, 2021, in the Third Judicial District Court, Salt Lake County, Utah, subsequently removed to Utah District Court on July 13, 2021. Plaintiff recorded a Lis Pendens on the Property with the County Recorder on October 4, 2021, also filed with the Court.

    On September 22, 2023, Plaintiff filed a motion for partial summary judgment on the grounds that her Notice of Rescission was valid and proper due to Defendant’s material disclosure errors in violation of the TILA, and Defendant’s subsequent foreclosure of Plaintiff’s home was therefore unlawful. The Defendants filed a motion for summary judgment on the exact same date alleging that (1) Plaintiff’s TILA rescission claim failed as a matter of law because she did not and could not tender the loan principal; (2) Plaintiff’s damages claims related to TILA violations, including actual damages, statutory damages, attorney fees, and finance charges were time-barred; and (3) Plaintiff’s claim for wrongful foreclosure was not supported by evidence of fraud in the foreclosure proceedings.

    Plaintiff had served Defendant with the expert report of Nelson Locke, whose testimony the Defendant sought to exclude in its entirety.

    Mortgage Expert Witness

    Nelson A. Locke has been an active Mortgage Loan Originator and Mortgage Banker from 1991 to 2013. While an active Mortgage Loan Originator and Mortgage Banker, he originated, underwrote, or approved approximately $450,000,000 of residential forward and reverse mortgage loans. From 2003 to 2013, he was the Legal and Compliance Manager for Value Financial, a Florida based HUD approved Direct Endorsement Lender. From 1991 to 2003, he was the CEO and Chairman of Amstar Financial Services, a publicly traded national HUD FHA Mortgage Banker headquartered in Florida. Since 1996, he has been a member in good standing of the Florida Association of Mortgage Professionals (“FAMP”), the largest state Mortgage Originator Association in the country, and a former President of that Association. While he was President, he wrote, produced, and hosted a public television series entitled “Ask Mr. Mortgage.”

    Discussion by the Court

    Federal Rule of Evidence 702 allows an expert to testify if the proponent has demonstrated by a preponderance of the evidence that:

    (a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; 

    (b) the testimony is based on sufficient facts or data;

    (c) the testimony is the product of reliable principles and methods; and

    (d) the expert’s opinion reflects a reliable application of the principles and methods to the facts of the case.

    The Defendant’s motion against Locke did not challenge his qualifications per se but was concerned with part (a) of Rule 702. Defendants objected to Locke’s expert opinions by arguing that “they were the type of impermissible legal analysis that attempt to usurp the role of the judge and jury and also because they exceeded their scope by improperly attempting to instruct the Court that Plaintiff had suffered various damages.”

    Plaintiff responded by asserting that Locke had the requisite qualifications and that his testimony was relevant and reliable.

    The Court observed that Locke, one of America’s foremost mortgage compliance experts, reviewed the Plaintiff’s Complaint, Defendant’s Answer, documents produced by the parties, and the origination and processing of Plaintiff’s Homestyle residential mortgage loan by Defendants in preparation to give his testimony.

    Locke’s assignment scope involved assessing Defendant’s handling of Plaintiff’s Homestyle Loan, examining the impact of rescission on foreclosure, and considering potential violations of Truth in Lending Act (TILA), the Real Estate Settlement Procedures Act (RESPA), and Unfair, Deceptive, or Abusive Acts or Practices (UDAAP). Locke also aimed to consider any other civil torts present in the case file.

    Defendant argued that Locke’s expert report contained numerous instances where he offered legal conclusions regarding the alleged facts of the case. For instance, Defendant pointed out that Locke’s statements regarding TILA rescission appeared to resemble legal opinions. Locke referenced relevant statutes and Supreme Court caselaw before concluding with his opinion that Plaintiff complied with both the timing and form of notice requirements, and that all of Plaintiff’s funds should have been immediately returned. Defendant asserted that admitting Locke’s “array of legal conclusions” concerning nearly every element of Plaintiff’s burden of proof could have undermined the Court’s duty to establish the law and the jury’s ability to apply it to the evidence.

    The Court granted in part Defendant’s motion to exclude Locke’s testimony. Testimony offering legal conclusions about the elements of the case Plaintiff was required to prove at trial was excluded. However, to the extent that Locke’s expert testimony provided helpful information to the jury regarding the process of obtaining a Homestyle Loan, or otherwise provided context for the mortgage process and other fact issues based on his expertise, it was not excluded.

    As for Plaintiff’s motion for partial summary judgment, the Court observed that Plaintiff sent a notice of rescission outside the three-day period, and none of the other required steps in 15 U.S.C. § 1635(b) were completed. The Court denied Plaintiff’s motion because Plaintiff’s Notice of Rescission was not enough alone to make the rescission complete.

    Coming to the Defendant’s motion for summary judgment, the Court held that Defendant cannot require Plaintiff to prove her ability to tender the loan proceeds without first petitioning the Court for an equitable reordering of the TILA rescission process. It was noted that Defendant had made no motion requesting that the Court alter the TILA rescission procedure. Therefore, summary judgment in favor of Defendant due to Plaintiff’s alleged inability to tender the loan proceeds was inappropriate and was denied.

    However, because the statute of limitations contained in 15 U.S.C. §1640(e) applied to Plaintiff’s damages claim and Plaintiff filed her damages claim three years after the alleged violations and consummation of the sale, the Court granted summary judgment for Defendant on Plaintiff’s damages claim.

    Defendant’s knowledge of the initiation of the timely rescission process and its failure to comply with the requirements of TILA after receiving notice of rescission indicated a genuine dispute of material fact as to the existence of unfair dealing in the foreclosure sale process. If the Plaintiff timely rescinded the loan from Defendant, the trust deed executed through the foreclosure sale became void. The Plaintiff had plausibly alleged that her interests were sacrificed based on Defendant’s improper foreclosure of the Property. Defendant was not entitled to summary judgment on the wrongful foreclosure claim based on the Court’s earlier order denying a continued stay of foreclosure. While the Court denied the Plaintiff’s request for continued injunctive relief, the merits of her claim remained to be determined. Therefore, the Court denied summary judgment for Defendant on the wrongful foreclosure claim.

    As of February 26, 2024, the Defendant filed a motion requesting the Court to reconsider the the Memorandum Decision denying Veritas’s Motion for Summary Judgment on Plaintiff’s TILA Rescission Claim.

    Held

    Plaintiff’s motion for partial summary judgment was denied by the Court while the Defendant’s Motion for Summary Judgment was granted in part and denied in part. The Court also granted in part Defendant’s motion to exclude Plaintiff’s Proposed expert Nelson Locke.

    The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.

    Key Takeaways:

    Locke, recognized as a leading mortgage compliance expert in the United States, was evaluated based on his qualifications and the relevance of his testimony within the scope of Rule 702. His analysis focused on assessing the Defendant’s handling of the Plaintiff’s mortgage loan and potential violations of various acts, demonstrating the importance of expert testimony directly addressing the case’s issues. However, the Court differentiated between permissible expert opinions providing helpful information to the jury regarding the mortgage process and impermissible legal conclusions, excluding the latter to avoid usurping the judge and jury’s role in interpreting the law. This decision highlights the necessity of expert testimony adhering to Rule 702’s criteria, including relevance, reliability, and staying within the expert’s scope of expertise.

    Case Details:

    Case Caption: Drummond V. Veritas Funding
    Docket Number: 2:21cv423
    Court: United States District Court, Utah
    Citation: 2024 U.S. Dist. LEXIS 22232
    Order Date: February 7, 2024
  • Insurance Expert Witness with Commercial and Residential Construction Experience Deemed Qualified to Present Observations of Plaintiff’s Property

    Insurance Expert Witness with Commercial and Residential Construction Experience Deemed Qualified to Present Observations of Plaintiff’s Property

    The case arises out of a claim for total replacement of a concrete tile roof due to hail damage under a businessowners insurance policy for a dental office at 550 24th Ave. SW in Norman (the “Property”). The hailstorm occurred on
    April 28, 2021.

    Defendant filed a Daubert motion to strike and exclude certain opinions and testimony of Fred Lupfer, a public adjuster engaged by Plaintiff as an expert witness. Defendant specifically objected to the following three opinions expressed by Lupfer: (1) opinions regarding the methodology and findings of Daniel Hillner, an engineer retained by Defendant who inspected Plaintiff’s property during claims handling; (2) opinions regarding the sufficiency of the claims handling in this case; and (3) opinions on questions of law and legal interpretation of the subject insurance contract in this case (Policy).

    Insurance Expert Witness

    Fred Lupfer is a licensed public adjuster in Texas with decades of commercial and residential construction experience. He has held a HAAG Commercial Roofing Certification since 2019, and has been a certified property appraiser and umpire since 2018. Starting a young age and throughout his life, he has been in and round the construction industry in a variety of ways. Some of those ways include project management, budgeting, estimating, contract negotiating, supervision, working with engineers and architects, and scheduling of subcontractors. He has also physically worked as a part of a crew in almost every aspect of construction from, framing, plumbing, electrical, concrete placement and finishing, roofing, sheetrock, and painting. The projects he has been involved with have varied from multimillion-dollar commercial buildings to residential remodels, including the building of multiple personal residents.

    Discussion by the Court

    The Defendant had asserted that Lupfer was not qualified to provide opinions regarding Hillner’s methodology as Lupfer lacked a engineering license and no engineer had supported his conclusions. It was specifically argued that Lupfer could not determine how an engineer would incorporate weather data into his assessment of storm damage, nor had the technical training to discredit Hillner’s opinion based on his speculation and conjecture that Hillner did not consider wind. After reviewing the submissions from both parties and considering Lupfer’s experience as a public adjuster, the Court concluded that Lupfer was indeed qualified to review, assess, and express opinions on Hillner’s report. Additionally, the Court noted that the majority of Hillner’s report did not seem to rely on specialized engineering knowledge. Any objections from the Defendants regarding Lupfer’s opinions were deemed to pertain to the weight, not the admissibility, of those opinions. It was further determined that Defendants could thoroughly question Lupfer during cross-examination regarding any alleged deficiencies in his opinions. Despite Defendant’s contention that Lupfer’s opinions might be improper credibility opinions, the Court found that Lupfer’s opinions were not improper credibility opinions but rather typical opinions offered by an opposing expert.

    Defendant also asserted that Lupfer was not qualified to opine on the sufficiency of Defendant’s claims handling. In its response, Plaintiff states that it did not intend to solicit any opinions from Lupfer concerning the handling of Plaintiff’s claim and that Lupfer would not critique Defendant’s claim handling. The Court, therefore, deemed that portion of Defendant’s Daubert motion moot.

    Plaintiff, however, stated in its response that Lupfer would be presenting opinions concerning the substantive information and documentation upon which Defendant and its adjuster relied in the context of his expertise followed by his own observations of Plaintiff’s property. The Court deemed Lupfer sufficiently qualified with decades of commercial and residential construction experience to his credit. The Court, once again, held that the objections raised by the Defendant called into question the weight of Lupfer’s opinions, instead of its admissibility. Defendants were presented with ample opportunity to thoroughly question Lupfer regarding any alleged deficiencies in his opinions during cross-examination.

    The Defendant had asserted that any opinions on questions of law or the legal interpretation of the Policy invaded the province of the jury and that such testimony would not be helpful. It was specifically stated by the Defendant that they were not moving to exclude Lupfer’s testimony regarding what he believed damaged the Property or which standards applied to the determination of hail damage. However, objections were raised to any testimony by Lupfer concerning what constituted “direct physical loss” under the policy.

    The Court reviewed Lupfer’s expert report and the parties’ submissions before determining that Lupfer did not appear to be offering prohibited legal opinions. It was noted that Lupfer did not opine on whether Defendant breached the Policy, that the damage must be covered by the Policy, or that Defendant’s actions were unreasonable. The jury was tasked with determining whether that loss/damage was covered by the Policy.

    Held

    The Court denied Defendant’s Daubert motion to exclude certain opinions of Plaintiff’s Expert Fred Lupfer.

    The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.

    Key Takeaways:

    The case underscores the importance of ensuring that expert witnesses possess the requisite qualifications and relevant experience to offer opinions on the matter at hand. In this instance, the Court carefully assessed Lupfer’s qualifications, ultimately deeming him qualified based on his extensive background as a public adjuster and decades of experience in commercial and residential construction. Additionally, it was crucial for expert witnesses to confine their testimony within the bounds of their expertise and avoid delving into areas requiring legal interpretation or exceeding their qualifications. Lupfer’s testimony was scrutinized to ensure it remained within the scope of his expertise and did not venture into areas of legal interpretation. The Court also emphasized the importance of expert opinions being grounded in factual observations rather than legal conclusions or subjective judgments. Lupfer’s opinions were deemed acceptable as they were based on his observations of the property and the substantive information and documentation provided. Furthermore, the Court underscored the necessity of providing the opposing party with ample opportunity to cross-examine the expert witness to challenge their opinions and highlight any perceived deficiencies. In conclusion, while expert testimony is invaluable in legal proceedings, it must be carefully evaluated to ensure relevance, reliability, and adherence to the expert’s qualifications and the scope of their expertise.

    Case Details:

    Case Caption: Oklahoma Dental Properties Llc V. Ace Property And Casualty Insurance Company
    Docket Number: 5:22cv815
    Court: United States District Court, Oklahoma Western
    Citation: 2024 U.S. Dist. LEXIS 24666
    Order Date: January 29, 2024
  • Intellectual Property Expert Witness’ Report Held to be a Treatise on Copyright Law in a Breach of Contract Case

    Intellectual Property Expert Witness’ Report Held to be a Treatise on Copyright Law in a Breach of Contract Case

    In 1996, after almost a decade of searching, Intersal, Inc. (“Intersal”), a marine research and recovery company, discovered the storied Queen Anne’s Revenge (“QAR”), flagship of the notorious pirate Blackbeard, off the coast of North Carolina. The vessel reportedly sank near Beaufort Inlet in 1718, and it has been the stuff of legend since. Although no treasure chests of gold were found in the debris, historical relics have been recovered from the QAR, and the rights to make images, replicas, and narratives about the relics have amounted to another form of treasure. Persistent disputes over the division of these rights have led to this litigation.

    On 1 September 1998, Intersal, DNCR, an executive agency of the State of North Carolina and a non-party, the Maritime Research Institute (“MRI”), entered into an agreement regarding the QAR and any resulting projects (the “1998 Agreement”). As a result of the 1998 Agreement, Intersal relinquished its right to receive 75% of the coins and precious metals recovered from the QAR in exchange for promotion opportunities arising from the QAR “Project,” as well as for assurances from DNCR that the El Salvador Permit would be renewed except for just cause.

    Plaintiff, Intersal sought damages for the Defendant, Wilson’s alleged breaches of Section 16(b) of the 2013 Settlement Agreement. Defendant Wilson serves as the Secretary of DNCR.

    Defendants retained Deborah Gerhardt, a professor of intellectual property law at the University of North Carolina—Chapel Hill School of Law. Gerhardt produced a report in which she answered four questions posed by Defendants’ counsel:

    1. Did the law permit someone to own rights in a narrative, such as the story about salvaging Blackbeard’s ship? If so, did intellectual property law give Intersal the exclusive right to commercial or noncommercial narratives about the QAR project even if such narratives were created by independent third parties?
    2. Did the 2013 Agreement give Intersal the exclusive right to commercial or noncommercial narratives about the QAR project? Specifically, did the 2013 Agreement prevent third parties from publishing content they created or obtained from lawful sources?
    3. Did the DNCR place Intersal’s intellectual property in the public domain?
    4. Did Intersal have an ownership interest in QAR photos taken by DNCR?

    In her thirteen-page report, Professor Gerhardt opined that (1) intellectual property law did not provide any foundation for Intersal to claim exclusive rights in the narrative (commercial or not) of salvaging the Queen Anne’s Revenge (“QAR”); (2) the Court should not have enforced any provision in a way that gave Intersal the exclusive right to telling the story of the QAR salvage as such an interpretation would have violated constitutional and federal public policy; (3) DNCR did not place any of Intersal’s intellectual property in the public domain because Intersal had failed to identify any protectable intellectual property; and (4) Intersal did not have an ownership interest in QAR photos taken by DNCR because no express written copyright assignment existed.

    Plaintiff filed a motion to exclude expert opinions from Deborah R. Gerhardt arguing they constituted inadmissible jury instructions and her own interpretation of the 2013 Agreement.

    Intellectual Property Expert Witness

    Deborah R. Gerhardt is a distinguished member of the Carolina Law faculty, having joined in 2009 and currently holding the position of Reef C. Ivey II Excellence Fund Term Professor of Law. Her expertise lies in intellectual property law, with a particular focus on the intersection of law and creativity. Gerhardt’s teaching portfolio includes courses such as Arts Entrepreneurship, Art Law, Copyright Law, Intellectual Property Law, and Trademark Law. Recognized for her excellence in teaching, she received UNC’s Distinguished Teaching Award for Post-Baccalaureate Instruction in 2018. Gerhardt is also a prolific writer, having authored numerous influential essays and articles covering topics such as copyright, trademark, entrepreneurship, and art law.

    Discussion by the Court

    Gerhardt admitted that her report reflected her legal opinions and conclusions regarding intellectual property law and her interpretation of the 2013 Agreement. Defendants contended that Professor Gerhardt’s testimony would assist the jury in understanding the facts. Defendants further asserted that Professor Gerhardt should be permitted to explain the difference between “commercial” and “non-commercial” because it was a technical term.

    The Court disagreed with Defendants noting that Gerhardt’s report was tantamount to a well-written legal memorandum on intellectual property law based on Gerhardt’s admission that her testimony would assist the jury in understanding the law, not the facts. It was after all the Court’s duty to ensure that the jury was appropriately instructed on the law with respect to the issues in this case.

    The Court observed that as far as the distinction between “commercial” and “non-commercial” was concerned, Gerhardt is an expert in the law, but she has not established herself as an expert in the publication of digital images such that she would be qualified to define a term of art in that arena. Moreover, nowhere in her report did Gerhardt actually offer a definition of “commercial” or “non-commercial.” Instead, she opined that use of the word “commercial” in the 2013 Agreement was “atypical.”

    Gerhardt did not directly address whether the hypothetical licensing model used by the Plaintiff’s expert was the correct approach as far as the case was concerned. Instead, Professor Gerhardt explained that because Intersal did not own the copyright to Defendants’ images, under copyright law, it would not be entitled to a licensing fee for their use.

    Gerhardt was found to misunderstand Intersal’s position. Intersal freely admitted it did not own the copyright to Defendants’ images and did not seek a license fee on that basis. Intersal’s claim focused on the value it allegedly lost when Defendants made the images publicly accessible without watermarks, time stamps, and weblinks. The Plaintiff’s expert used a lost licensing fee as a proxy to calculate the damages Intersal claimed to have suffered by not being able to publish its own images or to otherwise monetize third-party access to the site and its artifacts. Gerhardt’s proposed testimony did not address whether this use of a license fee was acceptable in the field of media rights, nor was her expertise in copyright law of any relevance in this regard.

    Because Gerhardt’s report was a treatise on copyright law, the Court agreed that it would confuse and mislead the jury when the Plaintiff demanded exclusion of the same under Rule 403.

    Held

    The Court granted the Plaintiff’s motion to exclude expert opinions from Defendant’s expert Deborah R. Gerhardt.

    Key Takeaways:

    Key takeaways regarding expert testimony include ensuring relevance and expertise, understanding the role of the expert, and distinguishing between matters of law and fact. Experts should provide clear, precise opinions directly related to the case, supported by evidence and reasoning understandable to the jury. They should avoid confusing or misleading the jury and address opposing arguments while ensuring their expertise is directly applicable to the case. Courts may exclude expert testimony if its probative value is outweighed by the risk of confusion or prejudice under Rule 403. Therefore, it’s crucial for experts to provide testimony that is relevant, clear, and appropriately limited in scope to assist the trier of fact in understanding complex issues without unduly influencing their judgment.

    Case Details:

    Case Caption: Intersal, Inc. v. Wilson
    Docket Number: 15 CVS 9995
    Court: North Carolina Superior Court, Wake County
    Citation: 2024 NCBC LEXIS 19 
    Order Date: February 2, 2024
  • Civil Engineering Expert Witness’ Assessment of Wind-Pressure Damage resulting from Hurricane Sally Admitted

    Civil Engineering Expert Witness’ Assessment of Wind-Pressure Damage resulting from Hurricane Sally Admitted

    Hurricane Sally, which made landfall in Gulf Shores, Alabama on September 16, 2020, damaged the Compass Point Condominium (the “Condo”). This action arises out of a disagreement between the insured, Compass Point Condominium Owners’ Association, Inc. (the “Plaintiff”), and its insurer, Landmark, regarding the extent of damage to Plaintiff’s property caused by Hurricane Sally, the necessary repairs, and the cost of those repairs. Landmark retained Sam Keke and Rob Senecal to investigate the cause and extent of the damages at the Condo and Compass Point sought the exclusion of their respective expert testimony.

    Civil Engineering Expert Witness

    Samuel D. Keske is an engineer who works for Wiss, Janney, Elstner Associates, Inc. with a bachelor’s, master’s, and Ph.D. in civil engineering from Auburn University. He is licensed in eight states and has worked for WJE for the past nine years. He is engaged in the investigation, assessment, and rehabilitation of a variety of new and existing structures, with a focus on the early-age and long-term performance of concrete structures. His experience includes comprehensive investigation and rehabilitation of bridges and civil infrastructure facilities; physical testing, analysis, and mitigation of building construction/design defects; and repair and strengthening design with on-site support.

    Construction Expert Witness

    Rob Senecal II, a Partner of Surety Division at YOUNG & Associates, started in the construction industry in 1982 as an engineering assistant with Perini Corporation. During his 30-year tenure at Perini, Senecal held various positions including Chief Field Engineer, Office Engineer, Estimator, Assistant Superintendent, Superintendent, General Superintendent, and Operations Manager. Senecal worked on a variety of projects including prisons, hospitals, waste treatment plants, pharmaceutical laboratories, casino hotel resorts, high-rise office towers, parking garages, and schools. As a Partner for YOUNG & Associates, Senecal has been involved with damage claims ranging in cost from 25K to over 100 million, including builder’s risk claims. He has consulted on the flood, hurricane, hail, fire, vandalism, and construction accident losses involving structures such as residential homes, manufacturing facilities, college and municipal buildings, exercise facilities, hotels, parking structures, restaurants, schools, and hospitals, prisons, docks and piers, highways, and high-rise construction.and schools.

    Discussion by the Court

    Landmark hired Sam Keske (“Keske”), an engineer from Wiss, Janney, Elstner Associates, Inc. (WJE), to conduct a damage assessment of the exterior windows, doors, and skylights of the Condo. Keske was designated to testify, among other things, regarding the wind speed and pressure generated by Hurricane Sally. Specifically, he expressed the opinion that the windows and doors of the Condo “were unlikely to have experienced wind-pressure damage from Hurricane Sally.”

    Compass Point sought the exclusion of Keske pursuant to Federal Rule of Evidence 702, arguing that (1) he was unqualified, (2) his methodology was unreliable, and (3) his opinion would be of little assistance to the trier of fact, with Landmark disputing each one of the grounds.

    The Court found that Keske was qualified as an expert. The record showed that Keske held a bachelor’s, master’s, and Ph.D. in civil engineering and was licensed in eight states. He had worked for WJE for nine years. Despite Compass Point’s assertion that Keske lacked sufficient experience specifically dealing with fenestration systems, Landmark pointed out Keske’s experience with condominium properties following hurricane events and his prior experience as the lead engineer investigating fenestration systems. The qualification standard for expert testimony was noted to be “not stringent,” with objections to the level of the expert’s expertise concerning the credibility and weight rather than admissibility so long as the expert was found to be minimally qualified, as cited by the Court in Hendrix v. Evenflo Co., 255 F.R.D. 568 (N.D. Fla. 2009). The Court found Keske qualified to testify in the action, after a review of the relevant supporting evidence.

    The Court held that Keske’s opinions were not subject to exclusion for unreliability. Keske used winds speeds recorded at six different weather locations within a 12-mile radius of Compass Point in order to calculate the wind load on Compass Point. Compass Point argued that the methodology Keske employed to calculate wind speeds and pressure deviated from standard practices and was based on “incorrect code data.” Compass Point additionally claimed that Keske used the wrong building code to determine fenestration wind loads. The Court held that Compass Point’s objections to the data used by Keske in his calculations called into question the weight and credibility of Keske’s opinions, not their admissibility which meant that the alleged shortcomings could be adequately addressed on cross examination.

    Additionally, Compass Point sought the exclusion of Keske’s testimony on the grounds that it would not assist the trier of fact. However, this argument relied largely on Compass Point’s contention that Keske’s opinions were unreliable, as discussed previously. Since the Court was not persuaded by Compass Point’s reliability argument, it also did not find that this rendered Keske’s testimony unhelpful. Moreover, the Court noted that Keske’s testimony was beyond the understanding of the average lay person and would assist the trier of fact in the action.

    Finally, Compass Point argued that Keske’s opinion should be excluded because it constituted hearsay and merely echoed the findings and conclusions of his co-workers. However, upon reviewing the relevant opinions, deposition testimony, and exhibits, the Court determined that Keske’s opinion was not simply a repetition of another expert’s findings. Instead, the record showed that Keske had conducted his own investigation and had consulted with his colleagues as part of the normal course of business. Therefore, the Court was not convinced that Keske was merely conveying hearsay, and exclusion was deemed unnecessary.

    In response to Compass Point’s motion to exclude Landmark’s expert Sam Keske (“Keske”), Landmark submitted a new affidavit from Keske containing new opinions and calculations and Compass Point responded by requesting the Court to strike paragraphs 7 and 9 of the Keske Affidavit. Since the Court had decided that Keske’s opinions need not be excluded without consideration of the affidavit submitted by Keske, Compass Point’s Motion to Strike was deemed moot by the Court.

    Rob Senecal, a building consultant for Young and Associates (Y&A), was designated to provide expert testimony regarding the reasonable and necessary costs for repairing the damage to the Condo. Y&A was hired by Landmark after Hurricane Sally to inspect and prepare a global repair estimate of damages caused to the Condo. Y&A conducted its first inspection of Compass Point in September 2020. According to Compass Point, this initial inspection formed the basis of the ultimate estimate provided by Y&A which was presented as part of Senecal’s expert disclosure.

    Compass Point sought the exclusion of Senecal under Rule 702, arguing that (1) the reason he could not recall details of the estimate was because he did not prepare it, (2) he disregarded his own cost assessment methodology outlined in the Xactimate user manual, and (3) his opinions were unreliable and would not assist the trier of fact. Additionally, Compass Point sought exclusion of Senecal’s testimony as per Rule 703 arguing it constituted hearsay. Each of these grounds were disputed by Landmark.

    The Court was not convinced that Senecal’s testimony should be excluded under Rule 703 as hearsay. The expert report disclosed by Senecal was not the same report which Compass Point repeatedly pointed out was not prepared by Senecal. Rather, an initial report was prepared by other Y&A consultants followed by nine more reports, and then ultimately the report which was disclosed, was in fact prepared by Senecal. While the Court appreciated Compass Point’s position that the ultimate report was based, in large part, on a previous report, it was not persuaded that Senecal should be prevented from testifying because his report also included estimates from previous reports. Rather, in this instance, it was evident that Senecal personally oversaw the project beginning in October 2020 which required his actual involvement in the mitigation and rebuild efforts, and he personally drafted the report submitted with his expert disclosures.

    The Court was additionally not persuaded that Senecal’s testimony should be excluded under Rule 702. Senecal’s estimate was prepared using the software application Xactimate, which had been accepted by Courts as a reliable method of construction cost valuation. Although Compass Point raised concerns about Senecal’s failure to seek out independent cost estimates and/or verify the amounts by the insured according to the Xactimate user agreement/manual, the Court deemed these objections to be more related to the weight of Senecal’s testimony rather than its admissibility.

    The Court was not persuaded that exclusion of Senecal’s testimony was warranted on the grounds that it would not assist the trier of fact. This argument, like the previous ones, relied largely on Compass Point’s assertion that Senecal’s opinions were unreliable. Since the Court did not find Compass Point’s reliability argument convincing, it also did not find that this made Senecal’s testimony unhelpful. Additionally, the Court noted that Senecal’s testimony was beyond the understanding of the average lay person and would assist the trier of fact in the action. Therefore, exclusion was deemed unnecessary.

    Held

    The Court denied Compass Point’s Motions to exclude the expert testimony of Sam Keske and Rob Senecal. Additionally, Compass Point’s Motion to Strike paragraphs 7 and 9 of the Keske Affidavit was deemed moot.

    The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution. 

    Key Takeaways

    In the case regarding the damage caused to Compass Point Condominium as a result of Hurricane Sally, expert testimony played a crucial role. Sam Keske, retained by Landmark American Insurance Company, was found qualified despite challenges from Compass Point regarding his expertise and methodology. The Court deemed Keske’s qualifications sufficient, emphasizing his background in civil engineering and his experience investigating fenestration systems. Despite objections to the reliability of his opinions, particularly regarding the methodology employed by him and data accuracy, the Court ruled that these concerns affected the weight of Keske’s testimony rather than its admissibility, allowing for cross-examination to address any discrepancies. Additionally, the Court determined that Keske’s testimony would assist the trier of fact. Similarly, Rob Senecal, a building consultant for Young and Associates, faced challenges regarding the admissibility of his testimony from Compass Point, including concerns about his involvement in preparing the estimate and the use of Xactimate for construction cost valuation. However, the Court found Senecal qualified as an expert based on his direct supervision of the project and extensive experience in the construction industry. Objections to the reliability of Senecal’s testimony were once again deemed issues of weight rather than admissibility. Ultimately, the Court ruled that both Keske’s and Senecal’s testimonies would assist the trier of fact, emphasizing the importance of expert knowledge in understanding complex issues related to damage assessment and repair costs.

    Case Details

    Case Caption: Compass Point Condo. Owners’ Ass’n, Inc. v. Landmark Am. Ins. Co.
    Docket Number: 1:22cv257
    Court: United States District Court, Alabama Southern
    Citation: 2024 U.S. Dist. LEXIS 32108
    Order Date: February 26, 2024
  • Pain Management Expert Witness Found to Lack Expertise in the Drafting or Revision of CPT Codes

    Pain Management Expert Witness Found to Lack Expertise in the Drafting or Revision of CPT Codes

    The Defendant, Laura Perryman, the founder and former CEO of Stimwave Technologies Incorporated and Stimwave LLC (together, “Stimwave”), was responsible for overseeing the design of the StimQ Peripheral Nerve Stimulation (“PNS”) System, a medical device (the “Device”) aimed at treating chronic pain by using electrical currents to target peripheral nerves, that is, the nerves outside the spinal cord. The device comprised four key components during the time at issue: the Lead, the Battery, the Pink Stylet, and the White Stylet. The Lead served as an implantable electrode array to stimulate the targeted nerve, while the externally worn Battery supplied power to the Lead. The Pink Stylet, containing copper, was implanted into the body to act as an “antenna,” lengthening the transmission range of the Battery.

    Stimwave labeled both the Pink Stylet and the White Stylet as “receivers” in its product materials for the Device. Perryman advised medical providers that they could bill insurers for implanting the White Stylet as a receiver using Current Procedural Terminology (CPT) code 64590. However, it was established that the White Stylet lacked copper and therefore could not function as a receiver.

    On December 19, 2023, the Government filed a superseding indictment against the Defendant, charging her with one count of conspiracy to commit health care fraud and wire fraud, one count of health care fraud, and one count of securities fraud. Both the Government and the Defendant filed their respective motions in limine on January 12, 2024. The Government’s motions included a motion to exclude the testimony of Dr. David A. Spinner. His expert report was attached to the Government’s motion. The parties filed their opposition to these motions on January 19.

    During the final pretrial conference on February 2, the Court excluded Spinner’s testimony under Fed. R. Evid. 401, 403, and 702. One of Spinner’s opinions focused on the White Stylet’s functionality, suggesting it served a medical purpose by preventing fluid ingress into the Lead and possibly averting collapse of the Lead’s lumen. However, the Court deemed Spinner’s opinion on the functionality of the White Stylet inadmissible, noting a lack of description on how he formed his opinion or his experience with the White Stylet or his basis for opining that it served a medical purpose. The expert’s opinion was merely his assertion without providing any evidence of testing or experimentation with the White Stylet, nor did he reference any widely accepted views within the medical community. The Court also ruled Spinner’s speculation on the White Stylet’s ability to prevent collapse of the lumen as inadmissible.

    Spinner also opined that reimbursement claims for implanting the Device could have been appropriately submitted to medical insurers using CPT code 64590, regardless of whether the White Stylet, the Pink Stylet, or no stylet was used with the StimQ PNS System. The Court emphasized the importance of the jury’s familiarity with the CPT codes, as they facilitated payment to medical providers. However, Spinner’s expertise on CPT codes was questioned, as he did not demonstrate specialized knowledge as to the interpretation or application of CPT codes. His opinion on CPT codes lacked explanation and failed to cite any sources or authorities on which his opinion was based. Furthermore, the Court deemed his opinion on CPT codes irrelevant, as it did not address the fact that Stimwave had marketed the White Stylet as a receiver.

    Following the Court’s ruling, the Defendant sought leave to supplement Spinner’s expert report. The Court approved the request, instructing the Defendant to submit the supplemental report to the Government by February 6. Additionally, the Court asked the Defendant to identify any section in the Stimwave materials that detailed the functionality of the White Stylet as Spinner did. On February 9, the Government renewed its motion to exclude Spinner’s testimony, which the Defendant opposed on February 12.

    Pain Management Expert Witness

    David A. Spinner is the Director of Pain Management at White Plains Hospital. He is double board-certified and specializes in interventional spinal care and musculoskeletal care, along with a sub-specialty in peripheral nerve stimulation (PNS) for chronic pain. Previously, Spinner served as the Medical Director at Westchester Pain Management. He obtained his Doctor of Osteopathic Medicine degree from the New York College of Osteopathic Medicine and completed his post-graduate training with an internship at Maimonides Medical Centre followed by a residency at Mount Sinai School of Medicine as well as a fellowship at Harvard Medical School’s Beth Israel Deaconess Medical Centre. Spinner is also recognized as the lead author and editor of “The Atlas of Ultrasound-Guided Musculoskeletal Injections,” one of the earliest textbooks on the subject of musculoskeletal injections. With extensive experience, Spinner has performed numerous PNS procedures and regularly trains other physicians in this field.

    Discussions by the Court

    The Government renewed its motion to exclude the opinions offered by Spinner in the February 6 report, as unreliable, unsupported, irrelevant, and unduly prejudicial. Spinner was given the chance to supplement his earlier report to demonstrate the reliability of the opinions he expressed in his initial report as per the requirements of Rule 702 and Daubert. The Court noted his failure to do so as well as addition of new opinions regarding CPT code and the functionality of the White Stylet as well as an entirely new opinion regarding patient harm, all deemed untimely and thus stricken. Furthermore, the Court observed that the Defendant could not establish the admissibility of any opinions in the February 6 report under Rule 702.

    Spinner’s February 6 report asserted that CPT codes were “drafted in a manner that contemplated application to the medical procedure employed.” Spinner acknowledged their susceptibility to varying interpretation. Drawing from his familiarity with the Device itself and the implantation procedures for neurostimulator devices to treat chronic pain, he opined that the procedure for permanently implanting the StimQ PNS System “came within the plain language interpretation” of CPT code 64590, regardless of the use of the White Stylet, the Pink Stylet, or no stylet, as the procedure always involved the insertion of a receiver. Spinner also shed some light on the process of drafting CPT codes and discussed the revision of CPT code 64590 in January 2024, suggesting that the revised CPT code 64590 and a new code that was created were “issued to cover new and innovative PNS devices such as the StimQ PNS System.”

    The Court noted that Spinner did not provide any basis for his expertise in the drafting or revision of CPT codes. As a physician specializing in pain management, he is personally responsible for claims submitted to insurers when he has implemented PNS devices. He highlighted a book for which he is the lead author that addressed the use of ultrasound techniques, which he explained were used to properly place neurostimulators implanted to treat peripheral nerve pain. He trained other physicians in PNS procedures. During that training, he was frequently asked to give advice on CPT codes and would typically advise that the prior version of CPT Code 64590 was applicable prior to the release of new CPT codes in 2024.

    Spinner did not demonstrate experience with implanting the White Stylet, which was necessary for him to be able to opine on the use of CPT codes for that procedure. He did not say that he ever implanted the White Stylet as a component of the StimQ PNS System. While he mentioned that he led trainings on implanting the Device, it was unclear whether the White Stylet was a component of the Device at that point in time and whether his advice on CPT Codes addressed what code should be used in connection with a procedure that included implanting the White Stylet. Spinner did not address the central allegations of the indictment, namely, that Perryman and her company informed medical providers that the White Stylet was a receiver and that they could use CPT code 64590 to bill insurers for implanting it as a receiver.

    In summary, the revised report did not address the deficiencies pointed out by the Court during the February 2 conference. Consequently, Spinner’s testimony on CPT codes was excluded under Rule 702 due to being beyond his areas of expertise, unreliable, and irrelevant. Pursuant to Rule 403, it was also excluded due to the risk of unfair prejudice and the likelihood of confusing the jury and diverting their attention from the pertinent issues. These concerns were deemed to outweigh any minimal probative value the testimony may have had.

    In her opposition to the Government’s motion to preclude Spinner from testifying, the Defendant did not suggest that Spinner had any expertise in CPT codes beyond his experience as a practitioner. She argued that Spinner’s experience as a provider qualified him to serve as an expert because it is the provider’s responsibility to determine the applicable CPT code for their medical procedures. However, Spinner’s experience as a provider did not qualify him to opine on the drafting or revision of CPT codes, as he was not involved in those processes. Therefore, any discussion of those topics in his February 6 report was beyond his area of expertise and deemed inadmissible.

    The Court observed that, while the Defendant demonstrated that Spinner was an experienced practitioner in the use of PNS devices, it was worth noting that his expert report did not address his experience with the White Stylet. He did not explain whether he had personally ever implanted the White Stylet or trained others to do so, or decided in either context which CPT code should be used to bill for a procedure involving the White Stylet being implanted. His experience in selecting CPT codes when implanting PNS devices did not automatically qualify him as an expert in CPT codes. Similarly, answering questions about CPT codes during training sessions about implanting a PNS device did not make him an expert on the codes. These deficiencies were relevant to determining whether he was qualified to serve as an expert on CPT codes in general and specifically as an expert on CPT codes relevant to the issues in this case.

    Spinner asserted that the White Stylet served several medical functions but stopped short of discussing its potential role as a receiver. Instead, he stated it “filled the inner lumen, thereby helping to prevent fluid ingress into the stimulator receiver and electrode array, which could result in a loss of function and heightened risk of infection or other collateral complications.” He added that it “would also assist in preventing the collapse of the lumen and in stabilizing and providing additional rigidity to stimulator receiver.”

    Spinner’s opinion regarding the functionality of the White Stylet was excluded under Rules 702 and 403. The Court noted that Spinner had provided no basis to establish that this testimony constituted a reliable expert opinion as required by Rule 702 and Daubert. Any probative value, which was minimal, was substantially outweighed by the risks of confusion, misleading the jury, and unnecessarily prolonging the trial.

    Spinner did not explain the basis for his opinions regarding functionality. He did not refer to any testing that supported his views on the necessity to use the White Stylet, which was marketed as a receiver, to perform separate functions. Nor did he reference any company-issued literature describing these functions as essential for the success of its electrode array or as reasons for implanting the White Stylet. Despite the Court’s request during the February 2 conference for the Defendant to identify any relevant company-issued literature regarding functionality, no such documentation was provided. Additionally, Spinner did not describe his own experience with the White Stylet, such as explaining why he deemed it necessary to implant it despite knowing it was not a receiver. Overall, there was no support or explanation provided to establish that these opinions on functionality were based on a reliable foundation or were anything other than Spinner’s assertions.

    The two documents cited by Spinner did not fill this gap. One was a document co-authored by the Defendant. While the Defendant would be given an opportunity at trial to explain her understanding of functionality, an expert could not serve as a substitute for that testimony under Fed. R. Evid. 704(b). In any event, Spinner did not quote any passage explaining that the stylet assisted the functionality of the Lead by sealing the lumen, preventing the lumen’s collapse, or stabilizing the Lead. His citation to a book regarding pacemakers was similarly vague.

    Spinner’s testimony was not salvaged by his observation that he was unaware of any study suggesting that leaving an implantable device “open” in the body was “desirable or beneficial.” He added that there was no PNS device on the market that left the device “open.” However, Spinner did not explain how the White Stylet prevented fluid ingress into the lumen, describe any testing to confirm White Stylet’s success in that function, or compare its effectiveness in doing so with other solutions for that issue. Consequently, his testimony amounted to a bald, unsupported statement of opinion.

    In her opposition to the Government’s motion, the Defendant argued that Spinner’s expert opinion was reliable because it was based on his professional experience. However, it was noted that Spinner did not describe any professional experience with the White Stylet, the functions it has served when he implanted the Device, or how he knew that the White Stylet prevented fluid from entering the Lead. He also did not mention ever implanting the Device during the years when it was sold with the White Stylet, nor did he state that he discussed the functionality of the White Stylet during the training sessions he conducted on PNS devices. Therefore, even if the use of the White Stylet in his own practice would have been sufficient to qualify Spinner as an expert on its functionality, his expert report did not describe such use. As a result, his testimony was not sufficiently reliable to meet the Rule 702 standard.

    Finally, the Defendant asserted that Spinner’s testimony was supported by a learned treatise, specifically the publication co-authored by the Defendant in 2015. However, Spinner failed to explain why the article was trustworthy or authoritative. Although defense counsel provided citation to the article, it did not address the role of a stylet in preventing fluid from entering the lumen of the Lead, preventing the collapse of the lumen, or stabilizing the Lead. The only function of the antenna discussed was its function as a receiver. Therefore, the article co-authored by the Defendant did not provide a basis to establish that Spinner’s opinion about the functionality of the White Stylet was supported by a learned treatise or was otherwise sufficiently reliable to be presented to a jury.

    Spinner added new opinions on the topic of patient harm that were not included in his initial report. He said that he was unaware “of any indication” that the use of the White Stylet “caused patient harm.” Additionally, he added that it was “highly unlikely” in his experience that its use would be the cause of any “actual patient harm.”

    Those opinions were deemed untimely by the Court as they were not included in Spinner’s expert report due on January 5. Consequently, they were excluded solely on this basis. Additionally, the Defendant failed to demonstrate the admissibility of Spinner’s testimony regarding patient harm as evidence.

    In any event, it appeared that the reason for proffering these opinions no longer existed. The Defendant had feared that the Government would offer evidence at trial suggesting that the use of the White Stylet had caused patient harm. For this reason, one of her motions in limine had requested that the Government be precluded from introducing such evidence. The Court had directed the parties to confer regarding the issue. In a letter dated February 13, the Government represented that it would not offer evidence of patient harm unless “the defense opened the door to the question of patient harm or benefit.”

    The Defendant argued that she had a right to rebut the Government’s experts and that excluding Spinner’s testimony would deprive her of a fair trial. She pointed out that Spinner was a recognized expert in PNS procedures. However, these arguments did not address the legal barriers to admitting Spinner’s testimony. His proposed testimony was deemed inadmissible under well-established legal standards. The Rules of Evidence were crucial in safeguarding a party’s right to a fair trial, and the Defendant was allowed to present evidence and challenge the Government’s evidence within the boundaries set by those rules.

    Held

    The Court granted the Government’s renewed motion in limine of February 9 to exclude the expert testimony of David Spinner.

    The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.

    Key Takeaways

    The expert testimony provided by Spinner in the case against Laura Perryman, the founder of Stimwave Technologies, faced numerous challenges and ultimately was excluded by the Court. Spinner’s opinions on the functionality of the White Stylet, a key component of the StimQ Peripheral Nerve Stimulation System, lacked sufficient basis and evidence, rendering them unreliable and irrelevant under Rule 702 and Rule 403. Despite attempts to supplement his initial report, Spinner failed to address the deficiencies highlighted by the Court, leading to the exclusion of his testimony. His expertise on CPT codes was also questioned, as his report demonstrated no specialization in this area and failed to address critical allegations in the indictment. The Court’s decision underscores the importance of expert testimony meeting stringent legal standards to ensure fairness and reliability in judicial proceedings.

    Case Details

    Case Caption: United States v. Perryman
    Docket Number: 1:23cr117
    Court: United States District Court, New York Southern
    Citation: 2024 U.S. Dist. LEXIS 26530
    Order Date: February 15, 2024
  • Psychology Expert Witness Testimony Regarding Trauma Resulting from Alleged Racial Discrimination Limited

    Psychology Expert Witness Testimony Regarding Trauma Resulting from Alleged Racial Discrimination Limited

    Plaintiffs and Proposed Class Representatives Quinton Burns and K.B (collectively “Burns”) brought this action individually and on behalf of all similarly situated Black people against Defendants SeaWorld Parks & Entertainment, Inc. and SeaWorld Parks & Entertainment, LLC on account of the alleged racial discrimination that they suffered at Defendants’ property, Sesame Place Philadelphia (“Sesame Place”).

    Plaintiffs—Black and Hispanic parents and their children—allege that, when they visited the park, costumed character performers refused to interact with them in favor of similarly situated white children. Plaintiff retained, Michael L. Lindsey, to opine on “the extent to which racial discrimination, experienced by Plaintiffs, psychologically and traumatically impacted them” as well as “the therapeutic needs Plaintiffs will have over the course of their respective lifetimes.”

    Lindsey interviewed the named Plaintiffs and some of their family members and compiled reports of his observations. He conducted “each” of these interviews “exactly” according to an interview protocol that asked questions of both the children and parents in the room. The extensive script consisting of questions directed at the children who were allegedly discriminated against and their parents was prepared based on the criteria in the Diagnostic and Statistics Manual – 5 (“DSM-5”), the widely used taxonomy of mental health
    disorders. The DSM-5 contains diagnostic criteria for post-traumatic stress disorder (“PTSD”), which include the presence of certain “intrusion symptoms,” such as recurrent “distressing memories” or “[d]issociative reactions (e.g., flashbacks), and “persistent avoidance of stimuli associated with the traumatic event(s),” which can manifest as “efforts to avoid activities, places, or physical reminders” of the event, “[m]arkedly diminished interest or participation in significant activities,” or “[s]ocially withdrawn behavior.”

    Lindsey prepared reports about each family after conducting nine interviews of up to two hours each. Lindsey concluded that racism should be conceptualized as a toxic stressor associated with internalizing and externalizing behaviors, anger, conduct problems, and delinquent behaviors in adolescents and preadolescents or even should be considered a form of violence. Lindsey opined that the behavior exhibited by SeaWorld’s costumed characters by shunning and ignoring children of color was a representative example of institutional racism. Lindsey categorized the same as an adverse childhood experience (ACE) and recommended trauma-informed care for the traumatic experiences created by SeaWorld. Lindsey opined that SeaWorld was required to compensate the Plaintiffs for their immediate harm, allocate funds for the collateral mental and physical consequences of such experiences, and pay punitive damages to substantially and significantly discourage other similarly situated institutions from perpetuating such experiences.

    SeaWorld filed a motion to strike the report and testimony of Plaintiffs’ expert, Michael Lindsey.

    Psychology Expert Witness

    Michael L. Lindsey is a lecturer in the Psychology Department at Southern Methodist University in Dallas, Texas and the President of Nestor Consultants, Inc., which offers multiple services, including psychological evaluations and diversity trainings. He received a juris doctor from Villanova Law School and a PhD in Clinical Psychology from Hahnemann University. He has taught classes on, among other topics, developmental psychology, child psychology, research methods, and the role of ethics and diversity in psychology. He is a member of the American Psychological Association’s (“APA”) Law and Society Division and is a member of the planning committee for the International Academy of Law and Mental Health.

    Discussion by the Court

    SeaWorld initially argued that, because Lindsey was not a licensed psychologist and did not maintain a clinical practice, he was not qualified to deliver his opinions as a matter of law. The Court held that Lindsey’s lack of a professional license was not dispositive. And while Lindsey did not have a clinical practice, he had extensive experience both lecturing on and researching issues related to developmental psychology and consulting on the precise type of psychological issues relevant to his reports.

    SeaWorld maintained that Lindsey’s reports were not based on “any methodology . . . let alone a methodology” that satisfied Daubert and its progeny. Sea World contended that Lindsey failed to show a causal relationship between the alleged racial discrimination Plaintiffs suffered at Sesame Place and the trauma he says they have suffered. SeaWorld also found fault with Lindsey’s decision to interview the Plaintiff families in a group, without ever speaking with the children alone. Finally, SeaWorld took issue with Lindsey’s nearly identical recommendations that the Plaintiff Parents receive therapy.

    Lindsey’s reports contained three separate findings, the last of which drove his recommendations that the Plaintiffs receive therapy and, especially, punitive damages:

    1. His professional experience and the scientific literature showed that, in general, ACEs “may cause trauma.”
    2. When ACEs in general “do result in trauma,” they should be treated with trauma-informed care.
    3. Based on Lindsey’s “professional opinion,” SeaWorld had created traumatic experiences for the identified family members.

    Implicit in his final finding was: (1) that what allegedly happened to the Plaintiff Children at Sesame Place constituted ACEs; (2) that those ACEs were the sort, in general, that caused trauma; and (3) that those individual ACEs, in fact, caused trauma for the Plaintiff Children.

    The Court noted that the APA made it clear that Lindsey’s chosen method of assessment, a clinical interview, was a widely accepted tool and altough his script might not have constituted a “structured diagnostic interview” per the APA’s handbook, this technique, although subjective, can still be sufficiently scientifically grounded to be reliable considering the interview protocol included several questions to both sets of interviewees aimed at understanding what happened to the Plaintiff Children at Sesame Place, how it made them feel at the time, and how they have processed the events since, all of which would help Lindsey evaluate whether they constituted ACEs.

    Next, SeaWorld’s argued that Lindsey “neither provided nor followed any identifiable framework to assess which adverse experiences result in ‘trauma.’” The Court noted the lack of a reliable method to determine whether the ACEs that he identified caused trauma in the specific instances he was tasked with examining. Clinical interviews like the ones Lindsey conducted remained, in his view, the primary basis for determining whether an ACE had caused trauma, even though SeaWorld identified multiple peer-reviewed tests that can be used to measure trauma in both adults and children. However, it was seen that Lindsey’s interview protocol, albeit nonstandard, contained questions that plainly tracked the diagnostic criteria for PTSD contained in the DSM-5, which SeaWorld conceded was “the authoritative work on mental disorders. The Court held that it constituted a scientifically grounded means by which he could assess, in combination with his experience and review of the relevant scientific literature, whether the ACEs that the Plaintiff Children experienced are the type that would cause trauma.

    The Court noted that Lindsey’s findings shifted in scope from the general to the individual, concluding that “SeaWorld had created traumatic experiences for these identified family members” and concluded that Lindsey’s reports were not based in the scientific method in this respect. Although Lindsey’s interview protocol did contain plenty of questions that would have allowed him to elicit the Plaintiff Children’s emotions and how they then related to amusement parks, it did not contain any mechanism for isolating the causes of those sentiments. Lindsey failed to ask the Plaintiff Parents about their children’s psychosocial history and he admitted in his deposition that he did not review Plaintiffs’ videos of some of the interactions between the children and the costumed characters, which could have helped him better understand the severity of the ACEs being described. Nor can the scientific literature he cited bridge the gap at this step because these studies discuss the potentially traumatic impact of ACEs that involve racism, not the actual traumatic nature of the ACEs that Lindsey identified.  Henceforth, Lindsey was not permitted to testify about whether the ACEs he identified caused the symptoms of trauma that he observed.

    He could testify that, based on his scientifically based interview protocol, review of relevant scientific literature, and years of professional experience, the alleged discriminatory events at Sesame Place were ACEs likely to cause trauma. He could also testify that the Plaintiff Children’s symptoms were consistent with trauma and that many interviewees and their family members could benefit from therapy. However, he couldn’t solely attribute the observed symptoms to the alleged discrimination at Sesame Place.

    SeaWorld pointed out that Lindsey failed to “control for ‘suggestibility’—a cognitive bias concept in which a child’s response’s may be influenced or contaminated by what parents or older siblings said about the events in issue or their feelings about said events when it interviewed the Parent and Child Plaintiffs together. However, the Court determined that such concern implicated Lindsey’s credibility and was the province of the jury. Moreover, despite making essentially the same recommendation for every Plaintiff Parent, whether interviewed or not, Lindsey’s failure to engage in any “differentiation or . . . individualized analysis” did not warrant exclusion considering Lindsey’s reports consisted of unique narratives of the interviews he conducted, including the responses from both the child and parent interviewees that informed his conclusions that what happened to Plaintiffs at Sesame Place constituted an ACE, in addition to the materially identical recommendations.

    The Court, citing UGI Sunbury LLC v. A Permanent Easement for 1.7575 Acres, 949 F.3d 825, 832 (3d Cir. 2020), held that Daubert requires that an expert’s testimony must be “‘sufficiently tied to the facts of the case,’ so that it ‘fits’ the dispute and will assist the trier of fact.” SeaWorld argued that the necessary fit was missing there because Lindsey stopped short of diagnosing any Plaintiff with a condition listed in the DSM-5. The Court held that the question of whether therapy (with or without a DSM-5 diagnosis) would be beneficial was relevant to questions that the jury would have to evaluate at trial. However, Lindsey’s reports would not warrant exclusion given the “liberal” nature of the “fit” inquiry under Daubert.

    SeaWorld also identified multiple statements in Lindsey’s reports that it argued were otherwise inadmissible as a matter of law. Lindsey’s discussion of institutional racism included a legal conclusion that SeaWorld argued must be stricken: “SeaWorld, by their behaviors of shunning and ignoring children of color, are representative examples of” individual or institutional racism. SeaWorld argued that the same must happen to Lindsey’s discussion of damages, where he concluded that “SeaWorld must pay Plaintiffs for their immediate harm, allocate funds for the collateral mental and physical consequences of these experiences, and pay punitive damages to substantially and significantly discourage other similarly situated institutions from perpetuating such experiences.” The Court held that the definition of “institutional racism” that Lindsey tagged SeaWorld with there—including a description of “institutional discrimination” as something that “targeted specific, easily stereotyped, generalizable attributes of individuals”—implied that the company acted with a degree volition that steered his conclusion too close to an ultimate issue in this case. The Court also held that opining on the appropriateness of the punitive damages was a job for the fact finder, not an expert witness.

    Held

    Defendants’ Motion was granted in that Michael Lindsey was precluded from testifying on: (1) whether Defendants, its employees, or its agents were the cause of the trauma symptoms that he observed during his clinical interviews of Plaintiffs; (2) whether the alleged incidents of racial discrimination at Sesame Place Philadelphia constitute intentional discrimination; or, (3) whether Plaintiffs are entitled to punitive damages.  Lindsey’s opinions on these issues were stricken by the Court but Defendants’ motion to strike the testimony of Lindsey was denied in all other respects.

    The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.

    Key Takeaways:

    SeaWorld initially contested Lindsey’s qualifications, citing his lack of a professional license and clinical practice. However, the Court determined that his extensive experience and expertise were sufficient, regardless of these factors. Additionally, SeaWorld challenged the methodology of Lindsey’s reports, arguing they lacked scientific basis. Despite this, the Court found his interview protocol and review of literature to be acceptable. Lindsey’s findings regarding trauma and therapy recommendations were upheld by the Court, although he couldn’t solely attribute symptoms to alleged discrimination. Concerns were raised about Lindsey’s use of the concept of “suggestibility” and the lack of individualized analysis, but the Court considered these matters of credibility for the jury to decide. The Court applied the Daubert standard to assess the admissibility of Lindsey’s testimony, allowing most of his reports to be admitted while ruling out some statements as inadmissible legal conclusions. SeaWorld’s objections regarding certain statements in Lindsey’s reports were upheld by the Court, affirming that determination of punitive damages is the role of the fact finder, not an expert witness. Overall, the text highlights the intricate process of evaluating expert testimony, with the Court meticulously scrutinizing Lindsey’s qualifications, methodology, and the admissibility of his reports and testimony.

    Case Details:

    Case Caption: Burns V. Seaworld Parks & Entertainment, Inc., Et Al
    Docket Number: 2:22cv2941
    Court: United States District Court, Pennsylvania Eastern
    Citation: 2024 U.S. Dist. LEXIS 29633
    Order Date: February 21, 2024