Plaintiffs Kyle and Annaleah Justice raised claims of negligence and strict liability against Defendants Bestway (USA), Inc. and Rural King under the Missouri Wrongful Death Statute. Plaintiffs’ claims arose from the drowning death of their minor daughter, E.M.J., in an above-ground pool on August 3, 2019.
Rural King argued that certain opinions of Plaintiffs’ retained human factors expert, Peggy Shibata, should be excluded. Shibata opined that Rural King failed to perform any hazard identification or risk assessment for the subject pool design. Moreover, Rural King did not perform any testing to identify potential design defects related to the climbability of the subject pool wall prior to, or after, selling the subject pool. Rural King contended that Shibata is unqualified to provide opinions about retail practices.
Plaintiffs’ consumer product regulatory expert, Joseph Mohorovic, opined that, in sourcing the subject pool from Bestway, Rural King failed to comply with the Consumer Product Safety Commission’s best practices for purchasing professionals procuring consumer products for export to the U.S.
Rural King argued that Mohorovic’s opinions are not relevant because he relied on voluntary guidance of the CPSC to “attempt to create a heightened duty of care under Missouri law.”
Mechanical Engineering Expert Witness
Peggy Shibata holds a bachelor’s degree in mechanical engineering as well as master’s degrees in both mechanical and biomedical engineering. Shibata specializes in mechanical engineering and biomechanics, with particular expertise in accident reconstruction, rigid body dynamics, computational modeling and analysis, human injury tolerance, and injury analyses associated with transportation, recreational activities and equipment, and falls.
Joseph Mohorovic was the former Commissioner of the United States Consumer Products Safety Commission (“CPSC”) and has spent much of his career in the private sector advising companies on hazard analysis, risk assessment, and regulatory compliance. A board-certified product safety expert, he specializes in adverse event analysis, regulatory compliance counseling, expert testimony and dispute resolution.
The Court held that the challenged opinions of Shibata and Mohorovic, which relate specifically to whether Rural King violated a duty of care to Plaintiffs, will be excluded because they are no longer relevant to the issues in this case. Because the Court previously granted summary judgment in favor of Rural King as to Plaintiffs’ negligence claim against it, Rural King’s alleged duty and breach are no longer at issue.
All of Mohorovic’s opinions and the three challenged opinions of Shibata relate specifically to whether Rural King had a duty to Plaintiffs that they breached; the opinions served no other purpose. Without any need to establish the elements of negligence against Rural King, the challenged opinions of these proposed experts will no longer be helpful to the jury and will therefore be excluded. Moreover, the challenged opinions of Shibata could mislead the jury as to Rural King’s duties.
Key Takeaway:
Because the Court previously granted summary judgment in favor of Rural King as to the Plaintiffs’ negligence claim against it, there was no need to establish the elements of negligence against Rural King. Therefore, the Court decided that the challenged opinions of Shibata and Mohorovic will be of little assistance to the jury.
Case Details:
Case Caption:
Kyle Justice V. Bestway USA, Inc. Bestway USA, Inc.
Plaintiff Elmer Kellar sued his employer, Defendant Union Pacific Railroad Company (“UPRR”), under the Federal Employer’s Liability Act (“FELA”). He sought damages for injuries he sustained when he drove his car off the road minutes after clocking out on January 17, 2021. Kellar claimed he fell asleep at the wheel.
Kellar argued that UPRR was negligent for failing to maintain a safe workplace. On January 17, 2021, and the days preceding, he had to work beyond the statutory 12-hour limit and/or was deprived of the adequate off-duty hours between on-duty periods. Kellar added that he was covered under the Hours of Service Act (“HSA”), which UPRR allegedly violated through its work schedule requirements on the date of the accident (and on previous occasions).
UPRR moved for summary judgment dismissing Kellar’s claims, arguing that it was not negligent under FELA and that Kellar was not covered by the HSA. Finding that fact issues existed as to whether Kellar was a utility employee covered by the HSA and whether UPRR violated the HSA, the Court denied summary judgment.
UPRR sought to exclude Kellar’s railroad expert witness, Lawrence Mann, under Daubert.
Whether UPRR acted negligently by failing to provide a safe workplace for Kellar and whether it was per se negligent for violating Hours of Service (HSA) provisions constituted the central issues in this case. The key question was whether Mann’s testimony would help the trier of fact address these matters.
Railroad Expert Witness
Lawrence M. Mann is an attorney with over 55 years of experience in railroad safety matters. Since 1996, Mann has been a member of the Federal Railroad Administration (FRA) Rail Safety Advisory Committee (RSAC). Within this committee, he participated in the FRA’s Fatigue Management Working Group, which was established in 2012. This group included officials from Union Pacific and representatives from the Association of American Railroads (AAR).
In addition to his work with the RSAC, Mann served as the principal draftsman of the Federal Railroad Safety Act of 1970 (FRSA). His extensive background in railroad safety has significantly influenced regulations and practices within the industry. Mann’s contributions to safety initiatives have played a vital role in shaping policies that prioritize the well-being of railroad workers and the public. His ongoing involvement in various committees and working groups reflects his commitment to improving safety standards across the railroad sector.
Mann stated that the opinions and facts presented in his report focused on railroad safety, fatigue management history in the railroad sector, and the specific safety risks associated with fatigue management in this industry. He provided this analysis and assessment to aid the trier-of-fact in understanding the technical application of hours-of-service regulations, which are generally not well-known outside the railroad industry, in relation to Kellar’s case.
Mann concluded his report with the observation that by allowing Kellar to work extended hours, Union Pacific had not implemented sufficient safety measures to address fatigue among employees like Kellar. Based on his expertise in safety and fatigue within the railroad industry, he believed that the company failed to take necessary precautions in this particular instance.
Defendant UPRR’s Argument
In its effort to exclude Mann, UPRR argued that his expert report resembled a legal brief. They claimed it consisted mainly of legal conclusions and the application of law to facts. Additionally, UPRR asserted that Mann lacked the qualifications to testify as an expert on railroad safety since he had never worked for a railroad. Instead, he had served as a plaintiff’s attorney and participated in drafting railroad safety regulations and legislation.
UPRR contended that Mann’s opinion on fatigue management regulations and their history were irrelevant. They noted that binding fatigue management regulations were not enacted until 2022, more than a year after the plaintiff’s accident. Furthermore, UPRR argued that Mann had not employed any recognized methodology and merely expressed his own opinions regarding the case’s facts. They particularly objected to his medical opinion, which stated that Kellar suffered from a disrupted circadian rhythm due to UPRR’s actions.
Plaintiff Kellar’s Counter-Argument
Kellar opposed the motion, arguing that he primarily presented Mann as an expert on railroad safety. He emphasized that Mann’s expertise was particularly relevant to understanding Union Pacific’s knowledge and foreseeability. These factors were crucial to assessing Union Pacific’s negligence in the case.
Analysis
For the negligence claim, the Plaintiff asserted that Mann’s report showed that Union Pacific recognized the risks of fatigue, making Kellar’s injury foreseeable.
UPRR’s corporate designee testified repeatedly to the railroad’s awareness of the risk presented by fatigue. Thus, there is simply no contested fact in issue that this portion of Mann’s testimony tends to prove, and Mann’s testimony on this point would not assist the jury in determining an issue for trial.
Furthermore, Mann lacked the qualifications to provide opinions on medical causation—specifically, that Kellar suffered from disrupted circadian rhythm caused by UPRR. Mann’s report did not reference any sleep study, nor did he possess a medical degree. Moreover, he had never worked as a sleep specialist. As a result, the Court excluded this testimony as well.
Mann’s testimony also stated that sleep deprivation increases the risk of falling asleep while driving. However, the Court held that the testimony was unnecessary because understanding fatigue’s onset and effects falls within the realm of the jury’s common experience.
For the negligence per se claim, much of Mann’s historical analysis of fatigue management lacked relevance. The Plaintiff needed to prove he was covered under the HSA and that UPRR violated HSA’s terms for this claim to hold water.
Mann’s appreciation of the legislative history of fatigue management regulations in the railroad industry, which incorporated many citations to statutes, the Federal Register, and House and Senate reports, would not help the trier of fact in making the required determination.
Mann could testify about the technical application of hours-of-service regulations, as UPRR did not contest his qualifications. Therefore, this testimony could provide useful expertise, provided it did not usurps the Court’s role.
Held
The Court granted in part the Defendant’s motion to exclude Plaintiff’s railroad expert witness Lawrence Mann’s testimony.
Key Takeaway:
To begin with, much of Mann’s testimony was excluded because he lacked a medical degree which was need to opine on causation in this case and his opinion on sleep deprivation fell within the jury’s ‘common experience and knowledge.’ Moreover, his appreciation of the legislative history of fatigue management regulations in the railroad industry will simply not assist the trier of fact in making the necessary determination.
Case Details:
Case caption:
Kellar v. Union Pac. Railroad Company
Docket Number:
2:21cv2045
Court:
United States District Court for the Eastern District of Louisiana
This is a trademark infringement case involving the trademarked phrase “Freedom Pop”. Plaintiff Proccor Pharmaceuticals, Inc. (“Proccor”) contended that Defendant GAT Sports infringed upon its alleged trademark for a “Freedom Pop” flavored Pre-Rx pre-workout supplement. GAT Sports essentially argued that the phrase was used in a non-trademark, descriptive, way to describe the flavor of its product.
The Plaintiff has retained Neil Smith as an expert to testify to various matters. Smith proposed to testify about the following:
1. The Freedom Pop trademark application was not for a flavor;
2. The specimen submitted for the Freedom Pop trademark application was filed in a procedurally proper manner;
3. Proccor’s use of the trademark on the product was a legitimate trademark use;
4. The requirements for trademarking Freedom Pop were met and the USPTO did not object to the specimen of use;
5. The Freedom Pop trademark is not a flavor trademark; and
6. The use of trademark in a list of flavors for “marketing purposes” “does not a flavor trademark make”.
Defendants requested that this Court enter an order precluding Plaintiff from offering at trial the testimony and opinions proffered by Neil Smith.
Intellectual Property Expert Witness
A former judge with the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office, Neil Smith has been an officer in many legal organizations, including President of the San Francisco Patent and Trademark Law Association, a member of the Board of Directors of the American Intellectual Property Law Association, and a founder and President of the Bay Area Intellectual Property American Inn of Court. He served on several ADR panels and is trained in arbitration, mediation, and early neutral evaluation.
He brings a wealth of expertise across a wide spectrum of intellectual property matters.
Defendants argued that Smith’s opinions are not helpful to the trier of fact in resolving a fact in dispute, that the opinions are inadmissible legal conclusions, that the opinions stand athwart the factual record, and that the opinions attempt to speculate about a state of mind.
Plaintiff observed that the Defendants’ motion is “difficult to follow because it does not cite to or quote the portions of Smith’s expert report that contain the opinions Defendants seek to exclude. Instead, it sweeps with a very broad, vague brush leaving the Court and Plaintiff guessing exactly what is sought to be excluded.”
Qualifications
A review of Smith’s background and the substance of his report reveals that he is a lawyer admirably trained in intellectual property law; thoroughly experienced in trademark practice and procedure; and familiar with both intellectual property disputes and the customs and practices prevalent in applying for, and granting, trademarks for a variety of products, including words, flavors, and smells. Further, Smith’s report reveals that his opinions address practice, procedure, custom, usage, and results common and accepted in the pertinent industry. Therefore, the Court held that his opinions are based directly on his training, experience, and observation and evince the necessary attributes of reliability.
Legal Conclusions
Especially because jurors are unfamiliar with the language, the procedure, and the practice of protecting a trademark, a properly qualified expert can testify about practice, procedure, custom, and usage in the industry, for which Smith is amply qualified. Of course, whenever a lawyer testifies about matters touching the law, the examiner must properly phrase the questions and the witness must properly constrain his responses to avoid offering an improper legal conclusion; instructing the jury on the law is the exclusive province of the judge. But providing orientation to the topic of, and the context for, the dispute, even though both occur within confines described by the law, is most helpful to a jury. The Court held that describing custom and usage in a pertinent industry and describing typical means and methods (that is, practice and procedure) is not the illicit offering of a legal opinion or conclusion.
Speculation
As to the objection about Smith’s opinions allegedly conflicting with the record, an expert may assume facts stated by the examiner and offer an opinion based on the assumed facts; if the assumed facts are disproven and rejected by the jury, the expert’s opinion likely suffers rejection. In other words, the Court held that the issue is the weight of the opinion and the likely success of the opinion but not the admissibility of the opinion.
The Court observed that the Defendants’ objection that Smith’s opinions address a “state of mind” and are therefore inadmissible receives only perfunctory treatment in the motion and remains ambiguous. But an accusation that an opinion is “untethered to reality,” although gratifying to the accuser, is not easily comprehensible when directed to the opinions offered by Smith in his report. For example, Smith observes that certain holders of certain marks advertise and sell their products using terms in the sense of ordinary usage to convey a message to the market and that the usage is not controlling over the legality of a trademark or whether something is, for trademark purposes, for example, a flavor or a distinct product, regardless of flavor.
In all events, the Court decided that Smith neither proposes to, nor will the law permit him to, speculate about someone else’s state of mind, but he may testify about trademark custom and usage in the industry, for which he is at least sufficiently qualified.
Held
The Court denied the Defendants’ motion in limine to exclude the testimony of Plaintiff’s expert Neil Smith.
Key Takeaways:
Describing custom and usage in a pertinent industry and describing typical means and methods (that is, practice and procedure) is not the illicit offering of a legal opinion or conclusion.
Moreover, Smith’s opinions are based directly on his training, experience, and observation and evince the necessary attributes of reliability.
Case Details:
Case Caption:
Proccor Pharmaceuticals, Inc. V. World Health Products, Llc Et Al
This case involves injuries caused by a falling sign at a retail store. Allison Howard alleged that on March 27, 2023, she was shopping in a Target store when she was hit in the neck and upper back by an improperly attached metal and wooden sign that fell from the top shelf of the aisle she was shopping in. Howard claimed that she did not cause the sign to fall.
At her deposition, Howard testified that the accident occurred when her ex-husband, Isaiah Laborde, who was playing catch with her children, tossed a stuffed animal (specifically, the crab Sebastian from the Little Mermaid) in the air and it hit the sign, causing it to fall. Laborde confirmed the same at his deposition. Nonetheless, Howard alleged that Target’s negligence caused the accident, and she sought various damages for her resulting injuries.
Howard hired Mitchell Wood as a liability expert to support her theory of the case. Target argued that Wood should be precluded from testifying for a myriad of reasons.
Architecture Expert Witness
Mitchell Wood holds degrees in architecture and civil engineering, has been a licensed architect for 36 years and a licensed commercial general contractor and residential builder for more than 25 years. He owns an architectural design and planning firm that performs residential and commercial design services, building and safety code reviews, site inspections, and project management. He also owns a residential and commercial building business. Wood has been involved in commercial and retail building design projects, including designing safe walkways. He has been accepted as an expert witness by Louisiana federal and state courts in the fields of construction, inspection, project management, site safety, architecture and design, and building codes.
Wood, after reading the complaint and Laborde’s deposition, studying photographs of the accident scene and the sign, and examining the stuffed animal (which weighs 1.27 ounces), issued a report in which he opined “that the metal/wood sign was not anchored in or attached to the support bracket in a secure manner.”
He stated that he deduced this opinion from the relatively light weight of the stuffed animal, which he said should not have been able to detach the heavier sign from the bracket.
Wood further opined that Target knew, or should have known, of the unsafe manner in which the sign was attached to the overhead bracket. And he stated that “Target’s failure to safely attach this metal/wood sign to the support bracket in question created a hazardous condition which resulted in an unreasonable risk of harm to its customers” that “could have been easily rectified by properly anchoring the metal/wood sign with a screw and/or bolt.”
Finally, according to Wood, “the hazardous condition and unreasonable risk of harm created by Target is a ‘prima facie’ cause and cause-in-fact of Howard’s injuries.”
Parties’ Positions
First, Target argued that, as an architect and general contractor, Wood is unqualified to render opinions in this matter because he does not have any experience or qualifications related to retail signage or falling merchandise claims, has never published on those subjects, and is not a retail safety expert. Next, Target contended that Wood’s opinions are unreliable because he did not inspect the sign, did not take into account Laborde’s actions as a cause of the accident, and did not conduct a duty-risk analysis before concluding that Target was at fault. Finally, Target argued that Wood’s opinions that a dangerous condition existed and that Target knew, or should have known, about it should be excluded as improper legal conclusions that will not assist the jury.
In opposition, Howard argued that Wood is qualified to render the opinions he stated in his report because he has decades of experience as an architect and contractor, including experience working on the design and safety of commercial buildings. She then recounts counsel’s efforts to arrange for Wood to inspect the property and blames Target for the lack of inspection. Howard contended that Wood’s opinions are relevant and reliable because he can testify as to the difference in the weight between the objects involved – a 1.27 ounce stuffed animal as compared to a 2.79 pound sign – and explain that the toy should not have been able to dislodge the sign if the sign was secured properly.
Howard also argued that Wood can explain the cost-benefit analysis regarding Target’s layout and alterative signage attachment systems. Finally, Howard argued that Wood’s opinions would be helpful to the jury because most jurors are not familiar with “retail signage attachment systems and general pedestrian safety precautions in a retail store setting.”
Analysis
Having weighed Wood’s report and qualifications against the arguments presented, the Court found that Wood’s education and experience qualify him to render the opinions expressed regarding the relative weights of the objects involved in the incident and available alternative methods for anchoring the sign. Those opinions are relevant and reliable. However, Wood may not offer any opinions as to ultimate factual or legal conclusions, including whether Target knew, or should have known, there was an unsafe condition, whether Target created an unreasonable risk of harm, and what constitutes a prima facie cause or cause-in-fact of the accident and injuries. These matters are reserved for either the factfinder or the Court.
Held
The Court granted Target’s motion in limine to exclude Mitchell Wood’s testimony as to precluding Wood from testifying as to ultimate factual and legal conclusions, including whether Target knew, or should have known, there was an unsafe condition, whether Target created an unreasonable risk of harm, and what was a prima facie cause or cause-in-fact of the accident and injuries. The motion is otherwise denied.
Key Takeaway:
Wood was barred from testifying as to ultimate factual and legal conclusions, but his education and experience qualify him to render opinions regarding the relative weights of the objects involved in the incident and available alternative methods for anchoring the sign.
Plaintiff I-Mab Biopharma (“I-Mab” or “Plaintiff”) brought trade secret misappropriation claims against Defendants Inhibrx, Inc. (“Inhibrx”) and Brendan Eckelman (“Dr. Eckelman” and collectively with Inhibrx, “Defendants”).
Plaintiff asserted that Defendants misappropriated nine trade secrets (that correspond to molecules designed to treat cancer) that are referred to herein as Trade Secret 1, Trade Secret 2, Trade Secret 4, Trade Secret 5, Trade Secret 6, Trade Secret 7, Trade Secret 8, Trade Secret 9 and Trade Secret 10.
Plaintiff filed a motion to exclude certain opinions offered by Defendants’ technical expert Dr. Roland Newman.
Immunology Expert Witness
Roland Newman has extensive experience in the biotechnology industry, including experience in developing therapeutic antibodies and in the manufacturing, preclinical development and clinical planning phases. This experience includes several years employed as Vice President and Chief Scientific Officer of Tanabe Research Labs USA. His scientific experience also covers immunology, molecular biology and biochemical research in both academic and industrial environments and he has over 100 peer reviewed publications, several book chapters and 30 patents.
One of the ways in which a claim for damages for trade secret misappropriation can be quantified is by measuring unjust enrichment; to that end, unjust enrichment can be assessed by identifying development costs that were avoided by the misappropriator but would have been incurred, if not for the misappropriation (i.e., “avoided costs”).
When Newman offered his opinion regarding Defendants’ avoided costs (the “redevelopment opinion”), Plaintiff contended that Newman’s redevelopment opinion is unreliable and lacks “fit” (and should therefore be excluded) because “the number was pulled out of thin air, the opinion ignores known R&D expenses, and the opinion fails to account for numerous categories of trade secret data and analysis.”
The Court agreed that Newman’s redevelopment opinion does not pass muster, even under Daubert‘s liberal standard for the following reasons:
First, the paragraph at issue does not give any hint as to where Newman derives the cited cost data from.
Second, Newman’s redevelopment opinion is also insufficient because he does not explain how it accounts for the different trade secrets at issue here. In other words, while “I-Mab’s trade secrets pertain to multiple different molecules and comprise different amounts and types of data,” Newman estimates one cost for the recreation of data from conducting a preclinical monkey toxicity study—$290,000—and applies it to each trade secret.
B.Newman’s opinions regarding Defendants’ use of the trade secrets
Newman opined that with respect to Defendants’ alleged use of Trade Secret 1, “no substantial changes were made in the clinical development path of INBRX-105” (“paragraph 116”). Plaintiff contended that this portion of paragraph 116 must be excluded because Newman cites to no supporting evidence and did not review Inhibrx’s clinical protocol amendments.
Newman also added that the amendments that Inhibrx did make were “standard practices in running a clinical trial and no significant changes to the protocol were made” (“paragraph 118”). Plaintiff contended that this portion of paragraph 118 must be excluded because Newman did not have sufficient experience to opine regarding what is standard practice with respect to amending clinical protocols and did not review the protocol amendments.
The Court does not agree that these opinions should be excluded. Newman did testify that he did not have “direct experience” amending a clinical protocol but the Court found Newman’s extensive experience in the biotechnology industry relevant. Newman described the changes that were made to the clinical protocol (and why these changes were made) and opines that certain particular modifications are standard practice in running a clinical trial. Moreover, Newman described changes that were made in the clinical development path of INBRX-105, which established the basis for his opinion that no substantial changes were made.
C. Newman’s opinions about public disclosure
Plaintiff next moved to exclude Newman’s opinions that certain of I-Mab’s trade secrets are disclosed in particular publications.
According to Plaintiff, these opinions should be excluded because Newman does not identify where in these publications Plaintiff’s trade secrets are disclosed, or because Newman’s views are just incorrect.
The Court will not exclude these opinions because Newman either included screenshots of the portions of the publications at issue that he opined contained publicly disclosed information with respect to certain trade secrets, or explained what the publicly disclosed information is in the publication at issue.
D. Newman’s opinions on ownership and reasonable measures
Finally, Plaintiff argued that Newman’s opinions regarding the ownership of Plaintiff’s trade secrets and any reasonable measures to protect them in the time period after Plaintiff’s corporate restructuring in April 2024 should be excluded, on lack-of-qualifications grounds. However, in light of the Court’s ruling that the October 2024 trial should cover events occurring prior to, but not later than, the date of the divestiture, the Court does not understand how post-divestiture reasonable measures are relevant to the conduct that will be at issue during trial. Therefore, this portion of the Motion is denied as moot.
Held
The Court granted Plaintiff’s motion only with respect to Dr. Roland Newman’s redevelopment opinion but otherwise denied it.
Key Takeaways:
Newman’s opinion about standard practices in running a clinical trial constitutes appropriate rebuttal testimony that he is qualified to offer.
Without any understandable explanation for how one cost for one type of study applies equally to all trade secrets at issue, Newman’s redevelopment opinion “does not fit the issues to be tried and is not helpful.”
Please refer to the blog previously published about this case:
The CLM Trust is the owner of real property including a home and multiple barns located at 25 Cattle Farm Road in Picayune, Mississippi. At all times relevant, these structures were insured under a homeowner’s policy issued by State Farm Fire and Casualty Company. CLM’s lawsuit arises from alleged damages caused by Tropical Storm Claudette on or about June 19, 2021, and additional damage caused by Hurricane Ida on or about August 29, 2021. State Farm’s estimate of damages to the home totalled $5,505.17, the actual cash value of which falls below the Policy deductible. On March 11, 2024, CLM designated its expert Public Adjuster/Appraiser, Richard Lyon to contest State Farm’s estimate of damages incurred. State Farm filed its motion to strike expert Lyon and supporting memorandum pursuant to Federal Rules of Civil Procedure 26 and 37 and Federal Rules of Evidence 702 and 403.
CLM was required to designate its expert witnesses no later than March 12, 2024. CLM timely filed its expert designation identifying Lyon and incorporating his June 8, 2023, estimate of repair for the home and additional Property structures. In its purported designation, CLM stated “Lyon’s report will be supplemented upon completion.” On June 6, 2024, more than two months after expiration of CLM’s expert designation deadline, CLM filed its motion to supplement expert eeport and amend case management order incorporating Lyon’s written May 30, 2024, expert report. State Farm argued that, not only is Lyon’s original report inadequate, but the supplemental report is an untimely “initial report” and sought to strike Lyon’s opinions for non-compliance with Rule 26.
Insurance Expert Witness
Richard Lyon is a licensed and bonded public insurance adjuster. He the founding member of Gulf Coast Adjusting, and enjoys over 15 years of working in the construction and insurance industries.
Lyon has been continually licensed by the State of Louisiana # 508253 and State of Mississippi # 10180259 and the State of New Jersey #1513282 as a Public Adjuster. He is proficient with insurance industry leading estimating software Xactimate and Xactcontents. Lyon is an admitted expert in the field of Claims Damage Estimating in Federal Court in the Eastern District of Louisiana.
CLM’s initial expert designation included Lyon’s curriculum vitae, compensation rate, previous testimony, photographs, roof reports, and estimates. CLM’s initial designation did not include the basis and reasons for Lyon’s estimates; the facts or data relied upon by Lyon in forming his opinions; or a written, signed report as to Lyon’s expected testimony. The Court held that these documents clearly do not meet requirements of a written report and are deficient pursuant to Rule 26. According to Rule 26, the initial report must be complete and not vague. Moreover, the Court held that Lyon’s estimates, without explanation or opinions, constitute “conclusory unsupported allegations.”
CLM argued that Lyon’s estimates constituted a report because it was to be supplemented at a later date. The Court held that CLM failed to properly designate Lyon as an expert on March 11, 2024. It was not until June 6, 2024, almost three months after CLM’s expert designation deadline, that it provided Lyon’s written May 30, 2024, report.
Substantially Justified or Harmless Factors
CLM argued that even if Lyon’s report was initially inadequate, the inadequacy should be excused as his report would still have to be substantially changed after State Farm provided its Supplemental Disclosures. CLM further argued that because a supplemental report would have been necessary regardless of Lyon’s initial report, any potential error is substantially harmless.
The Court looks to the following factors to determine whether a party’s failure to timely disclose an expert is harmless or substantially justified: “(1) the explanation for the failure to identify the witness; (2) the importance of the testimony; (3) potential prejudice in allowing the testimony; and (4) the availability of a continuance to cure such prejudice.”
The explanation for the failure to identify the witness
The first factor weighed in favor of State Farm. State Farm’s production of critical documents on March 25, 2024, after CLM’s expert designation deadline necessitated the subsequent report. As addressed earlier, Lyon’s “subsequent report” is instead his initial report. CLM failed to state why the initial report was not produced until more than two and a half months after the designation deadline or why Lyon needed this time to review the “critical documents” necessary to author his report. Instead, it appeared to the Court that CLM failed to explain to Lyon his true assignment—to create a report—until well after the designation deadline, uprooting CLM’s argument that Lyon intended to make a report on March 12, 2024.
The Court granted CLM an extension to March 12, 2024, in which to file its expert designation. CLM had ample time to submit Lyon’s initial report in a timely manner. Simply put, CLM was aware that the Rule 26 disclosures were due. It has failed to state why an initial report was not filed prior to the deadline.
Plaintiff asserted that Lyon is absolutely essential to CLM’s claims. While this factor leans in favor of CLM, the Court held that the importance of proposed testimony cannot ‘singularly override the enforcement of local rules and scheduling orders.’ Additionally, the importance of the testimony underscores how critical it is for a Plaintiff to timely designate the expert.
Potential prejudice in allowing the testimony
CLM did not timely designate Lyon. So, Lyon’s untimely report left State Farm without the chance to retain a counter-expert. CLM’s motion for leave to file supplemental expert report on June 6, 2024, was the first time it provided Lyon’s May 30, 2024, supplemental report, more than two months after State Farm’s expert designation deadline had expired. Additionally, this failure left State Farm’s deposition of Lyon at a disadvantage to prepare for trial or anticipate his future testimony. During his May 30, 2024, deposition, Lyon repeatedly could not, or refused to, answer questions regarding his investigation and inspection of the CLM property. Additionally, Lyon testified in his deposition that the June 8, 2023, estimate produced in CLM’s initial expert designation is “no longer relevant.”
The availability of a continuance to cure such prejudice
The ability and opportunity for State Farm to depose Lyon as to his May 30, 2024, report with a continuance still does not solve the prejudice, as “this would obviously result in additional delay and increase the expense of defending this lawsuit.” While CLM offered State Farm “the option to re-depose Lyon at Plaintiff’s expense after submission of the supplemental reports” this offer does not address the likely delay in the case and prejudice to State Farm. Additionally, a continuance would not alleviate the prejudice to State Farm as the discovery and expert deadlines have expired. Absent a rescheduling of deadlines State Farm is unable to retain counter-experts. Granting an extension of those deadlines would require a continuance of the trial, which weighs in favor of the Court striking Lyon’s opinions.
Held
The Court granted State Farm’s motion to strike Plaintiff’s expert Richard Lyon.
Key Takeaways:
Importance of proposed testimony cannot singularly override the enforcement of local rules and scheduling orders.
The ability and opportunity for State Farm to depose Lyon as to his May 30, 2024, report with a continuance still does not solve the prejudice, as “this would obviously result in additional delay and increase the expense of defending this lawsuit.”
The delay of even a few weeks in disclosing expert testimony disrupts the Court’s schedule and the opponent’s preparation and is thus prejudicial.
Case Details:
Case Caption:
Bigelow V. State Farm Fire And Casualty Company
Docket Number:
1:23cv285
Court:
United States District Court for the Southern District of Mississippi, Southern Division
Plaintiffs Richard Dennis, Port 22, LLC, and Michael Glass asserted Commodity Exchange Act and Sherman Antitrust Act claims, alleging that the Andersons, Inc. and Cargill Incorporated, who were supposed competitors, operated multiple grain storage warehouses in Ohio and collaborated to manipulate prices of soft red winter wheat futures and options contracts on the Chicago Board of Trade.
According to the Plaintiff, the Andersons, Inc. sold SRW wheat to the major purchasers in October and November 2017 to suppress demand for physical SRW wheat and then, on November 29, 2017, registered for delivery two thousand certificates of CBOT December 2017 SRW wheat.
This registration (falsely, Plaintiffs say) signaled that TAI would sell ten million bushels of physical SRW wheat to parties holding long positions in December 2017 SRW wheat futures and caused a marked price decrease in the December 2017 SRW wheat futures contract and widened the spread between the December 2017 and March 2018 SRW wheat futures contracts.
TAI and Cargill later repurchased some of the shipping certificates TAI had delivered at the decreased prices. Plaintiffs allegedly transacted in December 2017 and March 2018 SRW wheat futures and lost money because of the decreased prices caused by the scheme.
Plaintiffs’ expert Craig Pirrong opined in relevant part that Defendants artificially depressed prices of the December 2017 and March 2018 SRW wheat futures through a market manipulation that injured Plaintiffs on a class-wide basis; Pirrong also provided a methodology for determining individual damages. Through the report of their expert, Professor Justin McCrary, Defendants purported to challenge the reliability of Pirrong’s studies. Plaintiffs attacked Professor McCrary’s qualifications.
Economics Expert Witnesses
Justin McCrary is an “economist with expertise in microeconomics, economic modeling, and statistical method,” who teaches at the Law School at Columbia University. He has taught courses on economic theory econometric theory, antitrust, law and economics, and statistics and is a reviewer for leading peer-reviewed economics journals. He served on the Board of Directors of the American Law and Economics Association and has published papers in prominent economic journals.
Craig Pirrong‘s extensive qualifications includes approximately 30 years of concentrating professionally on competition and manipulation of prices with a focus on Chicago Mercantile Exchange wheat, soybean, and corn futures contracts; publishing a dozen peer-reviewed articles and a book on commodity futures manipulation and pricing; presenting to and consulting with federal agencies on manipulation; and testifying as an expert.
Plaintiffs argued McCrary: (1) is unqualified to give an opinion in this class action alleging market manipulation in wheat futures and options; (2) tenders opinions that are unreliable because they lack a scientific basis and he has never performed such quantitative work before; and (3) offers irrelevant opinions.
McCrary’s Qualifications
Plaintiffs insisted McCrary is unqualified to render an opinion in the realm of the commodity futures market, a conclusion they say is underscored by his professed unfamiliarity with “basic industry terminology” like “front month,” “spot month,” “strong stopper,” and “cash contract.”
The Court held that Plaintiffs’ surface-level attack on McCrary’s background and education is insufficient to demonstrate his lack of qualification, and the Court declines to exclude McCrary’s opinions, which Plaintiffs do not deny are rooted in statistics and economics, merely because he neither purports to be nor appears to be an expert in commodities futures trading or manipulation.
Reliability of McCrary’s Opinions
Plaintiffs argued McCrary’s opinions are unreliable, first, for lacking a scientific basis—because he opines Pirrong’s analyses fail to account for confounding fundamental factors that McCrary himself neither identified nor analyzed to determine any potential impact. But, as Defendants retort, that was not McCrary’s task; neither Daubert nor Rule 702 required McCrary to perform independent studies.
Although Plaintiffs labelled McCrary’s analysis thin and McCrary a mere mouthpiece for the defense, the Court finds he sufficiently explained the underpinnings for his opinions, which flow from his review of relevant literature, his expertise, experience and knowledge.
Finally, Plaintiffs attacked an isolated sentence of McCrary’s opinion regarding Pirrong’s event study and further attacked his criticism of Pirrong’s damages model because McCrary had “never worked with” data types he used in performing his calculations. The Court agreed with Defendants that the former argument takes McCrary’s statement out of context , and the latter argument lacks force because Plaintiffs identified no errors in McCrary’s calculations.
Relevance of McCrary’s Opinions
Plaintiffs finally briefly recycle most of the foregoing arguments, which the Court already has rejected, into an argument that Professor McCrary’s opinions will not help the trier of fact. Again, the Court disagreed. Although Professor McCrary does regurgitate some record evidence (such as that SRW wheat would be aging between December 2017 and March 2018), he does not merely repeat evidence but adds his opinions to the evidence he recites, including that Pirrong should have accounted for the aging of the wheat and other factors. For these reasons and those set forth above in addressing Plaintiffs’ prior arguments, the Court declines to strike McCrary’s opinions because they are relevant to understanding and analyzing Pirrong’s opinions regarding class certification.
Craig Pirrong
Plaintiffs proffered their expert witness, Dr. Craig Pirrong, an economist, who intended to testify that Defendants’ alleged manipulation artificially deflated prices in the December 2017 and March 2018 SRW wheat futures markets and caused damages to the proposed class that are capable of calculation on a class-wide basis.
In support, he presented: (1) an event study with regression analysis meant to measure the existence and amount of alleged price-artificiality in the December 2017 and March 2018 SRW futures and options contracts that is attributable to Defendants’ conduct rather than chance or other market factors; and (2) a damages model that takes the output from the event study as an input to calculate a range of aggregate damages. Such models may meet Plaintiffs’ burdens at the class certification stage.
A.Pirrong’s Event Study with Regression to Predict “But For” Wheat Prices
Pirrong first employed an event study with regression analysis intended to predict what prices would have been absent Defendants’ actions and statements.
In the context of this case, Pirrong’s regression model uses other grain commodities traded on CBOT as control variables; he estimates the historical relationship among the SRW wheat futures prices and the control variables by using “a control period consisting of data from March 1 to November 29 for the CBOT wheat futures contract for each year from 2005 through 2017.”
According to Pirrong, the model computes what would have been, but for Defendants’ conduct, the prices for December 2017 and March 2018 SRW wheat futures for each trading day between November 30, 2017 and December 14, 2017. He attributed the difference between his model’s output of estimated prices for December 2017 and March 2018 SRW wheat futures prices and the actual December 2017 and March 2018 SRW wheat futures prices to a “price artificiality” due to Defendant’s conduct.
Thought Defendants acknowledged that statistical regression is an established methodology, they argued that Pirrong “employed a ‘reliable methodology in an unreliable way” because the “results” are not “statistically significant” under generally accepted statistical principles and lead to an unacceptably high rate of false positives (predicted price manipulation in years in which none is alleged). They insisted that the study “cannot rule out” other potential causes of the SRW wheat futures price changes and has “dubious predictive value.”
1. Statistical Significance
Pirrong himself described p-values as “giving the probability of observing the residual,” which, here, is price artificiality, and conceded that “conventional thresholds” for statistical significance are five percent (0.05) and ten percent (0.1).
Defendants asserted that p-values above 0.05 indicate unreliable regression study results and emphasize “Pirrong offered no thresholds for determining when his event study results should be considered statistically significant,” despite having agreed that one must “choose a threshold” to “establish statistical significance.”
The Court is unconvinced that all of his results should be excluded due to some p-values above 0.05, particularly where seven of eleven days (November 30 through December 8, 2017) within the December 2017 SRW wheat contracts regression analysis returned p-values with statistical significance at the five percent level. Nor does the Court find that Pirrong’s non-articulation of a statistical significance threshold warrants blanket exclusion of his results here.
Second, even if Defendants sought to exclude just dates for which a p-value above 0.05 was returned, the Court under these circumstances declines to adopt a “hard and fast rule” requiring p-values of 0.05 or below, which in essence “evaluates statistical significance as a binary question” where “statistical significance lies at the 4.99% level but not at the 5.01% level.’”
Pirrong also emphasized that “eminent statisticians” have increasingly criticized the use of statistical significance cutoffs “because it is misleading and leads to erroneous conclusions” and that one should avoid “‘dichotomization as statistically significant or not.’”
The Court held that Defendants’ arguments go to the weight, rather than the admissibility, of the regression study results. Pirrong’s event study results in the December 2017 and March 2018 SRW Wheat futures contracts are sufficiently reliable for consideration.
2. Rate of False Positives
Defendants next asserted Pirrong’s study is undermined by the rate of “false positives,” or instances in which Pirrong’s model predicts price artificiality in years in which no manipulation is alleged. Defendants argued the higher the threshold for statistical significance one accepts as to the event study, the higher the rate of false positives the model returns. Accepting, for example, a 43% threshold for statistical significance (drawn from the highest p-value result Pirrong endorses, 0.43, applied across both the December 2017 and March 2018 studies) suggested price manipulation on 85% of the days for which Plaintiffs did not claim manipulation.
Adopting a 5% statistical significance level (which would result in statistical significance for the results of just seven days in the December 2017 study and none in the March 2018 study) garners a 19.66% rate of false positives. Defendants argued that these rates of false positives show the event study does not reflect a reliable application of statistical methods to this case.
Although the explanation regarding false positives is not robust, the Court nevertheless found that Pirrong’s testimony is “closer to shaky than unreliable.”
B. Pirrong’s Damages Estimates
Pirrong proffered damages methodologies to calculate individual damages and estimate aggregate class-wide damages using linear programming (the LP model).
1. Pirrong’s Use of “Permanent Artificiality” in March 2018 SRW Wheat Futures from December 14, 2017 through March 14, 2018
Defendants first attacked Pirrong’s opinion that the March 2018 SRW wheat futures contract had a permanent fixed artificial price depression of 1.2¢ per bushel from December 14, 2017 to March 14, 2018. Defendants asserted this use of a constant 1.2¢ residual is undermined by Pirrong’s choice to use a day-to-day approach for other transactions, as well as his opinion that publicly available information is immediately incorporated into the SRW futures marketplace.
Pirrong, though, opined that Defendants “distorted consumption by making excessive deliveries,” only a “fraction” of which they later repurchased, causing immediate consumption of wheat that “should have remained in storage for consumption later.” The effects of their actions “persisted into the indefinite future beyond November 30, 2017,” thus “distorting supply-demand fundamentals far into the future” and causing ongoing effects on prices. This price artificiality, Pirrong asserted, would remain constant after the December 2017 SRW wheat contract expired both because Defendants’ actions in the December contract could not affect prices after the expiration, and in an efficient futures market, the impacts of Defendants’ actions would be reflected in prices quickly and permanently.
Pirrong’s explanation provides support for his choice. And, despite Defendants’ attack, the Court held that his testimony is not “unsupported ipse dixit” because, rather than “pluck his conclusions out of thin air” he reviewed the identified records, performed studies, and applied his extensive experience in futures markets to reach those conclusions.
2. Outputs of the Damages Model
Defendants challenged the LP Model outputs for the model’s reliance “on the daily artificiality residual (i.e., the daily artificiality estimate produced by the event study) to calculate hundreds of thousands of hypothetical possible trade scenarios and conjures a supposed aggregate damage range for class members,” because it “cannot be applied to estimate the loss for any class member,” includes “computational errors that artificially inflate the damages estimate,” and did not “account for characteristics specific to many entities and individuals included in the group Pirrong purports to study,” like intraday traders and traders with offsets.
The Court held that Pirrong’s calculations, based upon his event studies, are sufficient to meet Plaintiff’s low burden here.
Defendants’ argument that “the LP model has several computational errors that artificially inflate the damages estimate” did not suggest damages cannot be calculated on a class-wide basis, and the Court is not seeking to calculate actual damages at this stage. As Plaintiffs point out, Defendants’ related argument that Pirrong’s model did not account for the characteristics of certain traders, boils down to an argument that some members of the defined class “ultimately were not harmed” by Defendants conduct, i.e., that their claims “will fail on the merits if and when damages are decided,” which is “a fact generally irrelevant to the district court’s decision on class certification.”
C. State-of-Mind Opinions and Legal Conclusions by Pirrong
Defendants argued that “Pirrong, an economist, lacks an analytically sound basis for ostensibly psychological conclusions” about Defendants’ “knowledge or intentions.”
The Court held that Pirrong properly may testify regarding “conclusions drawn only in his capacity as an economist.” This includes opining on potential economic motives of a party but not testimony of what a party knew because Pirrong is not more qualified than an ordinary juror to make the latter inferences.
Held
The Court denied Plaintiffs’ motion to exclude the testimony of Professor Justin McCrary, and the Court granted in part and denied in part the Defendants’ motion to exclude the testimony of Craig Pirrong.
Key Takeaways:
Professor McCrary neither purports to be nor appears to be an expert in commodities futures trading or manipulation but his opinions are rooted in statistics and economics.
The Court, like many others presented with the question, declines to use statistical significance at the five percent level as a proxy for reliability, and thus admissibility, for the purposes of Rule 702 and Daubert. Considering the entire data set presented, Pirrong’s explanations, and the class definition Plaintiffs propose regarding transactions of December 2017 and March 2018 SRW wheat set forth above, Defendants’ arguments go to the weight, rather than the admissibility, of the regression study results.
First, the Court has resolved the related argument regarding p-values, finding they do not render Pirrong’s testimony inadmissibly unreliable, in large part due to Pirrong’s explanation that “sound economic reasoning” indicates the impact of Defendants conduct would not have dispersed within days, despite the p-value results, and the spread was wider than anticipated for the December 2017 through March 2018 SRW wheat futures. Because Defendants’ false positives argument spins off from the p-values discussion and applies an across-the-board 43% threshold for statistical significance not adopted by Pirrong, the Court is disinclined to reach a different result here. Second, Defendants point to no flaws in Pirrong’s inputs to his studies. Defendants may explore false positives or other questions as to Pirrong’s studies through traditional evidentiary mechanisms.
Legal conclusions are inadmissible, while state-of-mind testimony is admissible where helpful to the jury and its probative value is not outweighed by a risk of unfair prejudice. The admissibility of alleged state-of-mind assertions is more nuanced. Direct opinions regarding state of mind are improper, although an expert may testify regarding the consistency of a certain action with a particular state of mind.
Plaintiff Dick’s Sporting Goods, Inc. (“DSG”) filed a lawsuit against Defendants Forbes/Cohen Florida Properties, L.P. (“Forbes”) and The Gardens Venture LLC (“Gardens Venture”) (collectively “Defendants”).
DSG claimed that Forbes tortiously interfered with its business and contractual relationships, which involved Sears, Roebuck, and Co. (“Sears”) and Transform Operating Stores LLC (“Transform”), specifically regarding the sublease of the second floor of the Sears store at the Gardens Mall (the “Palm Beach Gardens location”). Forbes allegedly refused to sign necessary forms for development applications submitted to the City of Palm Beach Gardens. DSG filed a lawsuit seeking compensatory and punitive damages, including out-of-pocket costs and net cash flows from operations.
To support its claim for damages, DSG presented the opinion and reports of accounting expert witness Louis G. Dudney. In response, Forbes retained accounting expert witness James S. Feltman to counter Dudney’s assertions.
Defendants filed a Daubert motion to exclude Dudney’s testimony. Meanwhile, DSG filed a motion to exclude specific parts of Feltman’s testimony.
Accounting Expert Witnesses
Louis G. Dudney, CPA, CFF, has extensive experience across various areas, including operational, financial, valuation, litigation, bankruptcy, and management consulting. His work encompasses financing, mergers and acquisitions, damages analysis, lost profit assessments, business valuations, solvency evaluations, debtor and credit advisory services, as well as corporate investigations.
He serves on the Management Committee at AlixPartners and is the Global Leader of the Investigations, Disputes, and Risk practice. Before joining AlixPartners, Dudney was a partner in the Financial Advisory Services Group at PricewaterhouseCoopers. He earned a Bachelor of Business Administration in accounting from The College of William & Mary and is a Certified Public Accountant. Additionally, he holds a certification in Financial Forensics from the American Institute of Certified Public Accountants.
James S. Feltman is a Managing Director in the Global Restructuring practice at Kroll, LLC. Kroll operates as a global advisor in valuation, corporate finance, investigations, disputes, cybersecurity, compliance, regulatory matters, and other governance-related issues. The firm employs nearly 3,500 professionals across 28 countries.
Feltman has qualified and testified as an expert witness in various federal and state courts. He focuses on forensic accounting and fraud investigations, bankruptcy, and solvency. Additionally, he provides expertise in commercial damages, business valuations, investment theory, and federal and state income taxation. He also addresses issues related to abusive tax shelters, accounting ethics and standards, and accounting malpractice. Furthermore, he deals with investment advisory matters and a range of other accounting, financial, and tax-related topics.
A. Defendants’ Motion to Exclude DSG’s Expert, Louis G. Dudney
DSG identified Louis G. Dudney as an expert witness on causation. He assessed the damages reasonably attributed to the Defendants’ tortious interference. Dudney submitted an initial expert report in 2021 and a supplemental report in 2024.
1. Defendants’ Arguments
Defendants contended that Dudney should not testify due to unreliable methodology. They cited several reasons:
He relied on outdated data.
He altered the corporate allocation rate in his 2024 report.
He failed to consider the proper cannibalization rate.
He used “skewed or ‘cherry-picked’ ex-post data.”
Dudney reduced the projected corporate allocation expenses in the damages analysis. Dudney says this was done in “accordance with DSG’s updated corporate practice for cost allocation in its pro formas.” Dudney also adopted the cannibalization rate that DSG calculated in his damages model. In his deposition testimony Dudney says he “[used the cannibalization rate] as one of the inputs to evaluate what is the impact and what the best estimate of the impact to Dick’s as a result of [Defendants’] behavior.”
Defendants argued the reduction in allocation expenses inflated DSG’s alleged damages. They claimed Dudney improperly relied on information from DSG, making the damages calculation unreliable.
2. Plaintiff’s Counter-Argument
DSG countered that Defendants had not adequately challenged Dudney’s methodology. Instead, they only criticized certain inputs in his calculations. The Court agreed, noting that the Defendants’ arguments questioned the weight of Dudney’s testimony rather than its admissibility.
3. Analysis
The Court reviewed Dudney’s deposition and expert reports and determined that he met the Daubert standard.
Defendants did not sufficiently challenge the reliability factors required for evaluation. For instance, they argued that he relied on a construction budget from 2015 and that his damages calculation assumed DSG would generate revenue during the COVID-19 pandemic. However, Defendants did not dispute the general acceptance of Dudney’s methodology within the scientific community.
Defendants argued that the reduction in allocation expenses “artificially inflates DSG’s alleged damages…and the damages calculation is unreliable because Dudney improperly relied on information provided to him by DSG.” The Court held that Defendants did not challenge the principles and methodologies Dudney applied to get to his conclusions. And it is not improper for an expert to rely on information given to him or made available to him “if experts in the particular field would reasonably rely on those kinds of fact or data.”
Also, the Court held that Dudney’s approach to calculating lost profits is accepted in the relevant scientific field.
Defendants did not otherwise challenge whether other experts in the field would not have reasonably relied on the facts and or data Dudney relied on. Their remaining objections primarily targeted his conclusions, alleging bias. The Court emphasized that perceived weaknesses in expert testimony should be addressed through vigorous cross-examination, not exclusion.
B. DSG’s Motion to Exclude Certain Opinions Offered by Defendants’ Expert, James S. Feltman
Defendants identified James S. Feltman as a rebuttal expert. He provided an initial report in 2022 and a supplement in 2024. DSG moved to exclude Feltman’s opinions on mitigating damages. Additionally, DSG sought to preclude Feltman from testifying about third-party demographic data or offering any undisclosed opinions under the Federal Rule of Civil Procedure 26.
1. The Third-Party Demographic Data
Feltman’s 2024 report included a section on “Target Market Data.” This discussion consisted of data collected from two third-party software systems. DSG argued that Feltman did not analyze the data to establish a cannibalization rate. They pointed out that he admitted he was not an expert in demographic analysis and lacked formal training. DSG asserted that Feltman possessed no specialized knowledge to apply the demographic data in a way that would assist the trier of fact.
Defendants countered that Feltman did not need to be a demographer to serve as a rebuttal expert on damages. The Court partially agreed.
Feltman was a global advisor in areas such as valuation and corporate finance. He had previously been qualified and testified as an expert in commercial damages. He stated that he had training in analyzing databases and applying them to specific cases. Feltman used resources from two databases, ArcGis and Placer.ai, and applied that information to the facts of this case to reach a conclusion on mitigation of damages.
It was acceptable for Feltman to rely on otherwise inadmissible hearsay when forming his opinion, according to Rule 703. However, he could not serve as a conduit for hearsay. Rule 703 specified that if the facts or data were inadmissible, the proponent of the opinion could only disclose them to the jury if their probative value significantly outweighed their prejudicial effect. Defendants did not sufficiently demonstrate how the third-party demographic data met this requirement.
Therefore, DSG’s motion regarding the third-party demographic data was granted in part and denied in part. Feltman would be allowed to testify about the conclusions he reached using the data, but the data itself was deemed inadmissible hearsay.
2. Feltman’s Opinions on the Mitigation of Damages
DSG claimed that Feltman’s opinions on mitigation were based on unreliable methods. Defendants responded that Feltman was a rebuttal expert who relied on publicly available facts and conducted a comparative analysis. The Court agreed with Defendants. DSG did not challenge the methodology used by Feltman; instead, it suggested additional analyses that could have been performed.
The Court held that DSG’s objections focused on the weight of the evidence rather than its admissibility.
3. Feltman’s Opinions Related to the Sears Bankruptcy and New Opinions at Trial
Given the Court’s Supplemental Order on the bankruptcy issue, DSG’s motion regarding Feltman’s opinions on the bankruptcy was denied as moot. The Court resolved the legal implications of the Sears bankruptcy, and no evidence to the contrary would be allowed.
DSG’s motion to exclude any new or additional opinions was granted. Defendants were prohibited from presenting new opinions through Feltman’s testimony that DSG had not previously been informed of under Federal Rule of Civil Procedure 26.
Held
The Court denied the Defendants’ motion to exclude Plaintiff’s accounting expert witness, Louis Dudney’s testimony.
The Court granted in part and denied in part the Plaintiff’s motion to exclude certain opinions from Defendants’ accounting expert witness, James Feltman.
1. Feltman was prohibited from discussing the legal implications of the bankruptcy as it had already been resolved.
2. Feltman was barred from presenting any new opinions that had not been previously disclosed under Rule 26.
3. Feltman could provide opinions on the mitigation of damages, but he could not testify to otherwise inadmissible hearsay that he relied
Key Takeaway:
Plaintiff did not challenge the methodology that Feltman used; instead, it pointed to additional analyses that could have been done. A methodology is not rendered excludable under Daubert if it fails to include every possible test that could have been conducted.
Moreover, Rule 702 and Daubert are instructive that the Court’s analysis on a Daubert motion is not of the conclusions, rather the principles and methodologies applied to get to those conclusions. Defendants did not challenge the principles and methodologies Dudney applied to get to his conclusions. And it is not improper for an expert to rely on information given to him or made available to him “if experts in the particular field would reasonably rely on those kinds of fact or data.”
Case Details:
Case caption:
Dick’s Sporting Goods, Inc. V. Forbes/Cohen Florida Properties, L.P. Et Al
Docket Number:
9:20cv80157
Court:
United States District Court for the Southern District of Florida
Plaintiff Lori LaRock filed a medical malpractice and negligence against Albany County Nursing Home (“ACNH”), the County of Albany, Larry Slatky, Debbie Gossman, Rhonda Lyga, and John and Jane Does #1-5 (collectively “Defendants”).
Plaintiff asserted that she and her family often found Sanford unfed, unbathed, ungroomed, and covered in his own urine and vomit. On February 24, 2018, about a week prior to Sanford’s passing, LaRock noticed a change in her father: he seemed lethargic; was coughing more than usual; and his breathing sounded raspy.
On March 1, 2018, LaRock, after receiving a voicemail message from Gossman regarding Sanford’s condition, went to the nursing home, where she found her father “laying unattended in his room in agony,” “drenched in sweat,” “violently gasping for air,” with “an oxygen tube hanging from his nose.”
LaRock called 911, and, according to “contemporaneous records from emergency paramedics,” Sanford was “found laying in the hospital bed unresponsive in obvious respiratory failure near respiratory arrest, was pale and sweating excessively, and was in need of immediate airway support.”
Sanford was transferred to Albany Medical Center, where doctors assessed that he “likely aspirated on his own vomit,” and “medical care was too late.” Sanford passed away on March 3, 2018 of aspiration pneumonia.
Plaintiff sought to exclude and/or limit the testimony of Defendants’ experts, Steven Salzman and Beth Anne Maas.
Pulmonary Disease Expert Witness
Steven Henry Salzman has over 35 years of experience in the fields of Pulmonary Disease and Critical Care Medicine. He is board-certified in Internal Medicine, Pulmonary Disease, Critical Care Medicine and Sleep Medicine. Salzman held the position of Chief, Pulmonary and Critical Care Medicine, NYU Winthrop Hospital in Mineola, Long Island, NY. He received his medical degree from New York University Grossman School of Medicine.
Beth Anne Maas graduated from Thomas Jefferson University with a Bachelor of Science Nursing. She received a Master’s in Health Administration degree from Saint Joseph’s University. Her professional concentration has been long-term care since graduating in 1988.
Plaintiff sought to prohibit Steven Salzman from 1) offering legal conclusions, 2) testifying as to ACNH’s staff training or the Department of Health’s investigation, and 3) offering unreliable opinions.
Defendants 1) agreed that experts may not offer legal conclusions but 2) argued that Salzman’s experience as a physician qualified him to testify as to the contested topics and 3) asserted that Salzman’s testimony is thoroughly reliable because it is based on a wider set of considerations and data than Plaintiff’s experts.
Legal Conclusions
First, the Court found that the Plaintiff’s cited opinions in Salzman’s expert report illustrated Salzman offering a legal conclusion, and thus, ruled that they are barred from being elicited during his testimony. In the expert report, Salzman asserted that “the staff at the Albany County Nursing Home was not deliberately indifferent to the needs of Sanford,” and that he has “seen no evidence to demonstrate there was a persistent and widespread pattern and practice of violating Sanford or any other residents’ rights.”
Such statements “track the exact language” of the legal issues at issue in this case, and thus, they “couch his opinions in terms that derive their definitions from judicial interpretations.” Salzman’s statements in the expert report also relied on “his assessment of the testimony and credibility of other witnesses” and are “not based on personal knowledge.” Therefore, they constituted legal conclusions, rather than factual conclusions, which must be excluded. To the extent the Salzman offered further potential legal conclusions in his testimony, the Court reserved judgment.
Qualifications
Salzman is a pulmonary and critical care physician, a “general field” which is closely related to the subject of running an effective medical facility, including staff training and the use of SBAR strategies. Indeed, this Court is hesitant to impose “an overly narrow test of Salzman’s qualifications,” particularly where his opinion as a physician with a sub-specialty in critical care might at least provide some assistance to the jury in determining the factual issues.
So long as Salzman “explains how his experience leads to the conclusions he reaches, why that experience is a sufficient basis for the opinion, and how that experience is reliably applied to the facts,” the Court will not exclude his testimony on staff training or the use of SBAR strategies due to a lack of expertise.
The Court barred certain opinions highlighted by Plaintiff in which Salzman opines on the appropriateness of the ACNH’s policies and the thoroughness or reliability of the DOH investigation. For instance, his opinion that the “policies in place at the ACNH were appropriate” appears to rely entirely on the fact that “the DOH did not request that any policies be altered, modified or changed in any way.”
The Court held that such opinions are mere regurgitations of “facts that the jury is ‘fully capable of understanding” and “offer nothing more than what ‘lawyers representing [Defendants] could provide during their closing arguments’” and thus must be excluded.
Beth Anne Maas
Plaintiff argued that Defendants’ Nursing Expert Beth Anne Maas should be precluded from testifying on medical diagnosis or causation, DOH investigatory policies, procedures, and findings, and legal conclusions.
The Court agrees with the parties that Maas may not offer opinions on causation or legal conclusions but reserves its decision on whether Maas’ testimony on the DOH investigation is permissible as reliant on her professional experiences.
Legal Conclusions
The Court precluded Maas precluded from testifying as to whether the ACNH was “deliberately indifferent” to Sanford, whether a “pattern and practice of violating Sanford or any other residents’ rights” exists, and whether staffing levels “violated New York State regulations.” The cited portions of the report explicitly state ultimate legal conclusions using language which “couches her opinions in terms that derive their definitions from judicial interpretations.”
Causation
The Court agreed that medical causation is outside of a nurse’s expertise, and therefore, found Maas may not testify as to the causes of Sanford’s death. Moreover, Maas may not simply restate findings which can be independently introduced by Defendants through other evidence.
As to the testimony regarding the DOH investigation, the Court finds that in the portions of the report cited by Plaintiff, Maas is not merely referencing the record in front of her, as Defendants asserted. Instead, Maas appears to be expressing independent opinions based on the record. However, as provided in the report, such opinions heavily regurgitate “facts that the jury is ‘fully capable of understanding’” and do not explicitly state any other basis for the opinions. For this reason, they must be excluded unless Maas can adequately tie her conclusions to her personal or professional experiences.
The Court reserved judgment on the admissibility of Maas’ various opinions until they are presented at trial but warned that such opinions may not concern medical causation or offer legal conclusions. Additionally, to the extent Maas’ testimony involved repeating facts established by other witnesses for purposes of summary or explanation, the Court will hear objections as to whether that testimony is needlessly cumulative and should be excluded per FRE 403.
Held
The Court granted in part and denied in part the Plaintiff’s motion to exclude and/or limit the testimony of Defendants’ experts, Steven Salzman and Beth Anne Maas.
Key Takeaways:
Certain opinions offered by Salzman offer his own assessment of the record unmoored from any expertise.
Testimony merely restating the facts which can be presented independently through other evidence will be barred and expert witnesses may not be offered as mere summarizers.
Case Details:
Case Caption:
Larock V. Albany County Nursing Home Et Al
Docket Number:
1:19cv604
Court:
United States District Court for the Northern District of New York
Plaintiff Matthew Alan Hearn brought certain claims against the Defendants City of Bakersfield, police detective Christian Walter Hernandez V, police sergeant Nathan A. Anderberg, and probation officer S. Jauch, collectively “City Defendants,” and County of Kern, collectively “County Defendants”. He based these claims on their actions during a law enforcement encounter on September 27, 2020, in Bakersfield. He alleged six causes of action: (1) Battery; (2) Intentional Infliction of Emotional Distress; (3) Negligence; (4) Violations of California Civil Code Section 52.1 (Bane Act)-Civil Rights Violations; (5) Excessive Force; and (6) Unreasonable Search and Seizure.
Plaintiff retained psychology expert witness, Daniel S. Rubiaco to conduct a psychological assessment and behavior analysis of him during the incident. Defendants filed a motion to preclude Daniel S. Rubiaco from testifying under Rule 702.
Psychology Expert Witness
Daniel S. Rubiaco, Psy.D., LCSW, is a licensed psychologist practicing in a private setting in Bakersfield, CA. He graduated from The Chicago School of Professional Psychology – Los Angeles Campus in September 2017, earning a Doctor of Psychology in Applied Clinical Psychology. Additionally, he obtained a master’s degree in Social Work from California State University, Bakersfield, in 2007. Earlier, he completed two undergraduate degrees in Sociology and Communications at the University of California, Davis, in 2003.
His practice focuses on supporting adolescents, young adults, and professionals dealing with stress, anxiety, depression, posttraumatic stress disorder (PTSD), and major conflict. He has significant experience working with victims of violent crimes, guiding them through the complexities of the criminal court process.
Defendants argued that Rubiaco’s proposed testimony would not assist the jury in understanding the evidence or determining any key facts. They noted that he did not examine or interview Plaintiff, nor did he review his deposition. Instead, his testimony focused on Plaintiff’s behaviors, suggesting they “made logical and reasonable sense.”
Defendants referenced Federal Rule of Evidence 702 and relevant case law regarding the burden of proving admissibility. They emphasized the district court’s role as the “gatekeeper” for expert testimony, highlighting the necessity of “good grounds” for expert opinions.
Furthermore, Defendants contended that the jury needed to decide whether they conducted an unlawful search and seizure of Plaintiff’s vehicle and whether they used unreasonable force during the arrest. They maintained that these matters did not require the opinion of a psychologist like Rubiaco.
B. Plaintiff’s Argument
Plaintiff agreed with some of the case authorities cited by the Defendants but disagreed with their conclusions. He contended that Rubiaco would help the jury understand Plaintiff’s behavior during the arrest and detention, which he argued was abnormal. Plaintiff stated that Defendants could cross-examine Rubiaco on this matter.
C. Defendant’s Reply
In their reply, Defendants claimed that Plaintiff’s opposition failed to show how Rubiaco’s review of his alleged personality was relevant to the jury’s consideration. They cited case law and Federal Rules of Evidence 401, 402, 403, and 404, which address relevance, weighing of equities, and the inadmissibility of character trait evidence and its exceptions.
Ultimately, Defendants argued that Rubiaco’s opinions were neither relevant nor admissible, asserting that no exceptions applied to his testimony.
D. Analysis
Defendants sought to exclude Rubiaco’s testimony, focusing on the relevancy aspect. They did not argue that his testimony failed the reliability standard. The Court needed to independently assess whether Plaintiff met his burden regarding both prongs.
Rubiaco acknowledged in his report that he could not perform a clinical diagnosis of Plaintiff. He did not interview or assess Plaintiff directly. Additionally, he had not reviewed Plaintiff’s deposition before finalizing his report due to the absence of a transcript. He planned to amend the report after reviewing the transcript, indicating its importance.
His opinions were based on a limited review of discovery materials, including law enforcement reports, body-worn camera footage, medical records, and two recorded calls. He applied “the Generic Cognitive Model” to assess the Plaintiff’s cognitive structures and beliefs.
The Generic Cognitive Model (GCM) is a psychological framework used to understand how individuals process information and react to experiences. It posits that people have cognitive structures—mental frameworks and schemas—that shape their perceptions, thoughts, and behaviors in response to various situations.
For example, he opined that Plaintiff was “pro-law enforcement” based on two comments made during the incident. He argued that when Plaintiff experienced an activating event, automatic responses categorized information in a way that activated a maladaptive schema. Consequently, he claimed that Plaintiff’s emotional state led to defensive behavior.
Ultimately, the Court found that Rubiaco’s proposed testimony failed both the reliability and relevancy standards under Daubert. Plaintiff did not demonstrate that the Generic Cognitive Model applied reliably, given the lack of direct assessment or comprehensive review of Plaintiff’s history.
Moreover, Rubiaco’s main opinion lacked relevance. Although Plaintiff argued that this testimony would aid jurors, he did not clarify how it would assist in deciding the case. Thus, if admitted, Rubiaco’s testimony would distract jurors and risk confusion, further supporting its exclusion.
Held
The Court granted the Defendant’s motion to exclude the Plaintiff’s psychology expert witness, Daniel Rubiaco.
Key Takeaway:
The Court highlighted that Rubiaco did not directly assess the Plaintiff, failed to submit a comprehensive review of his background, and relied on a limited selection of materials. Additionally, the Court found that Rubiaco’s analysis did not clearly assist the jury in understanding key issues related to the case. Ultimately, the lack of direct engagement with the Plaintiff and insufficient clarity on how his insights would aid the jury led to the exclusion of his testimony.
Case Details:
Case caption:
Hearn v. City of Bakersfield
Docket Number:
1:22cv668
Court:
United States District Court for the Eastern District of California
