Expert Witness Profiler

Tag: Hearsay

  • Court limits the testimony of Chemical Engineering Expert Witness citing his lack of familiarity with technical aspects of Polycarbonate technology, its design, or its operation amidst claims of trade secrets misappropriation

    Court limits the testimony of Chemical Engineering Expert Witness citing his lack of familiarity with technical aspects of Polycarbonate technology, its design, or its operation amidst claims of trade secrets misappropriation

    Trinseo Europe GmbH filed a lawsuit against several Defendants, including Stephen Harper, Steve Harper Consulting, Inc., Polycarbonate Consulting Services, Inc., Kellogg Brown & Root, LLC (KBR), William Davis, and Polycarbonate Resins Consulting, LLC. The lawsuit alleged that these parties had unlawfully obtained Trinseo’s trade secrets and confidential information associated with polycarbonate manufacturing. Polycarbonate is a thermoplastic used in various specialized commercial and consumer products like automobile components, specific eyeglass lenses, and medical devices.

    Trinseo accused KBR of knowingly utilizing these trade secrets and confidential data to develop a “PCMax licensing package.” This package was then sold by KBR to Chinese companies, enabling them to establish competing polycarbonate manufacturing plants in China. In response to the lawsuit, Defendants appointed Michael Kratochwill as their expert on polycarbonate markets, specifically focusing on Trinseo’s position within those markets. Kratochwill presented a 59-page expert report and provided testimony through deposition.

    Trinseo, in its request to the Court, sought the exclusion of specific opinions and testimony offered by Michael Kratochwill. Trinseo alleged that Kratochwill’s opinions and testimony amounted to impermissible repetition of research reports in which he had no involvement in preparing.

    Chemical Engineering Expert Witness 

    Michael Kratochwill possesses substantial expertise in advising clients on various areas including screening for acquisition and investment opportunities, financial transactions, and commercial development related to new products and technologies. His professional portfolio includes significant involvement in expert witness and testimony work, particularly in appraisals, valuations, and the dynamics of industry and technology. With over 45 years of experience in the industry, Kratochwill brings a wealth of knowledge and practical understanding to his engagements. He has been a member of the AIChE since 1970 and the SPE since 1979. Michael holds a Bachelor of Science in Chemical Engineering from Drexel University, US, and a Master of Business Administration from Widener University, US.

    Discussion by the Court

    Trinseo contended that Michael Kratochwill’s approach primarily involved repeating and amalgamating the work of others. Employed by “IHS Markit,” a company known for producing subscription-based products for the chemical industry, Kratochwill’s expert report consisted basically of a series of citations to numerous IHS Markit subscription reports and a synthesis of those reports. Trinseo argued that Kratochwill’s reliance on subscription reports he hadn’t contributed to was unjustified, especially considering his lack of independent expertise specifically in the realm of polycarbonate. Despite being designated as an expert in polycarbonate markets, Kratochwill admitted that his familiarity with these markets wasn’t distinctively tailored to this sector but was more aligned with his broader experience in analyzing various markets.

    The Court found that Kratochwill was not qualified by training or expertise to discuss the technical aspects of PC technology, its design, or its operation.

    As for Kratochwill’s opinions lacking reliability on account of his virtually exclusive reliance on various studies and industry reports, Defendant responded by pointing out that the Federal Rules of Evidence permit an expert to base their opinion on factors outside of their own firsthand knowledge or observation. As per Federal Rules of Evidence 703, the expert is allowed to rely on certain kinds of hearsay. Nevertheless, while an expert may rely on reliable studies and reports, he is not permitted to be a mere vehicle to bring this hearsay in front of the jury. This applies not only to direct testimony based upon personal knowledge and experience on the topic at issue, but also to efforts to synthesize a number of facts or analysis from other sources into an expert opinion.

    The Court outlined the purpose of expert reports, emphasizing the need for these reports to present the expert’s opinions and the foundation for those opinions. Acknowledging that expert reports qualify as hearsay, the Court stated its refusal to admit the reports without unanimous agreement among the parties.

    Recognizing the extensive historical context involved in the PC business spanning decades, the Court highlighted the challenge for any expert to comprehensively cover the entire industry history. It noted that experts often rely on pre-existing facts or data predating their involvement or on insights from predecessors in the industry, provided such reliance aligns with the norms of the field.

    However, the Court drew a clear line, disallowing experts from merely regurgitating opinions formulated by others. It emphasized that such individuals would not qualify as experts but rather as conduits for others’ opinions. The Court denied the motion to exclude with such parameters in mind. The ruling, though, did not prevent the Plaintiff from objecting should the witness attempt to solely repeat others’ opinions. The Court suggested that challenging such a witness would be more effectively done through opposing evidence and a robust cross-examination.

    Michael Kratochwill was barred from providing testimony regarding the technical facets of PC technology, encompassing its manufacturing and design aspects. However, he was permitted to testify about PC markets, under the condition that his testimony adhered to Rule 703. The Court explicitly stated that he could not simply repeat the opinions of others during his testimony.

    Held

    The Court granted in part and denied in part Plaintiff, Trinseo Europe GmbH’s motion to exclude certain opinions and testimony of Defendants, Stephen Harper and Polycarbonate Consulting, Inc.’s expert Michael Kratochwill.

    Key Takeaways

    The Court barred Michael Kratochwill from providing any expert testimony on the technical aspects of polycarbonate (PC) technology and manufacturing because he lacked the necessary training, expertise, and firsthand knowledge to opine on how PC is designed or operated.

    However, Kratochwill was allowed to testify as an expert on polycarbonate markets and industry trends. But his testimony must comply with Federal Rule of Evidence 703 – he cannot simply parrot or regurgitate opinions and analysis performed entirely by others. The Court was clear that experts must present their own independent opinions and reasoning.

    While experts may rely on outside studies, reports, and data to inform their opinions, as is common practice, they cannot serve merely as a vehicle to bring otherwise inadmissible hearsay before a jury. Synthesizing others’ research into an expert opinion is also insufficient. The Court emphasized experts must contribute original analysis and judgment.

  • Expert’s opinion need not rely on admissible evidence to be admissible; Court deems a motion to bar forensic accounting expert witness premature

    Expert’s opinion need not rely on admissible evidence to be admissible; Court deems a motion to bar forensic accounting expert witness premature

    Justin Guy, a former employee of Absopure where he worked as a driver transporting products within the state of Michigan, had filed a collective action lawsuit on behalf of himself and 25 opt-in Plaintiffs, alleging that Absopure violated the Fair Labor Standards Act (FLSA) by not paying overtime for hours worked in excess of 40 per week. Throughout the litigation, Absopure contended that its drivers, including some of the Plaintiffs, were exempt from FLSA’s overtime provisions under the Motor Carrier Act (MCA) exemption.

    One of the key points of contention in the case was whether the “small vehicle exception” to the MCA exemption applicable to the Plaintiffs. This exception would entitle them to overtime pay if they drove trucks weighing less than 10,001 pounds, regardless of the MCA exemption.

    The parties had ongoing disputes related to discovery, particularly concerning the weight of the vehicles driven by the Plaintiffs and the hours worked by them. Following a Court order, Absopure was required to furnish Plaintiff with information it possessed relevant to the topics of Absopure’s discovery requests to Plaintiff , while the Plaintiffs were instructed to respond with any agreements or disagreements they might have with the information furnished by Absopure.

    Absopure had submitted an interrogatory to the Plaintiffs requesting that they identify each day they drove a vehicle weighing 10,000 pounds or less and each day they drove a vehicle weighing 10,001 pounds or more during the relevant time period. As per the Court’s order, Absopure provided a statement and additional information about the weights of vehicles it claimed were driven by the Plaintiffs. Plaintiffs’ counsel reported that they were conferring with opt-in Plaintiffs regarding their vehicle usage. Subsequently, the Plaintiffs provided Absopure with a summary chart detailing the estimated number of times that 18 opt-in Plaintiffs had driven vehicles weighing 10,000 pounds or less. Notably, only five of those 18 Plaintiffs had submitted declarations stating the number of times they drove small vehicles and similar declarations for the remaining 13 Plaintiffs on the chart were missing.

    The parties also disputed the number of hours worked by the Plaintiffs. Plaintiffs initially provided Absopure with a chart estimating the daily start and end times for 22 Plaintiffs, although this chart was not sworn to by any of the Plaintiffs. Additionally, Plaintiffs’ expert, Martin K. Williams, calculated the Plaintiffs’ asserted damages based in part on his review of this estimated hours-worked chart.

    Absopure had submitted a motion in limine seeking several specific actions from the Court. These requests included, first, the request to prohibit the Plaintiffs from offering any testimony or evidence related to the small vehicle exception to the Motor Carrier Act (MCA) as a sanction under Federal Rule of Civil Procedure 37 due to the Plaintiffs’ failure to respond to Absopure’s interrogatories.

    Additionally, Absopure asked the Court to exclude from evidence the Plaintiffs’ estimated hours-worked chart, which had been attached as Exhibit A to the Plaintiffs’ third supplemental initial disclosures. Absopure had argued that this chart consisted of inadmissible hearsay and hence warranted exclusion.

    Finally, Absopure also requested the Court to exclude the testimony of the Plaintiffs’ proffered damages expert, Martin Williams.

    However, after Absopure filed its motion, the Plaintiffs subsequently provided Absopure with sworn declarations from 19 Plaintiffs, which contained estimates of the hours they had worked.

    Forensic Accounting Expert Witness

    Martin K. Williams, CPA/CFF, CFE is a twenty-two year Certified Public Accountant and sixteen-year seasoned forensic accountant/expert witness. He specializes in economic damages and lost profits in cases pertaining to breach of contract, shareholder disputes, personal injury and marital dissolution. He holds a Bachelor’s and Master’s degree in Business Administration from University of Miami Herbert Business School.

    Discussions by the Court

    The Court first addressed Absopure’s request to prohibit Plaintiffs from presenting any evidence or testimony related to the small vehicle exception to the MCA exemption as a sanction under Rule 37. The Court recognized that the small vehicle exception was highly relevant to the parties’ claims and defenses. The Court also acknowledged that Plaintiffs failed to adequately respond to Absopure’s interrogatory asking them to specify which vehicles under 10,000 pounds they drove. However, the Court determined that imposing sanctions at this stage would be premature if Plaintiffs promptly supplemented their discovery responses as required.  

    Instead of imposing sanctions immediately, the Court ordered Plaintiffs to produce for every Plaintiff for whom recovery is sought, a declaration, affidavit, or sworn testimony by October 31, 2023 specifying the number of times the Plaintiffs drove vehicles under 10,000 pounds. The Court stated that reasonable estimates could be used if Plaintiffs attested exact numbers were unknown. The Court warned that any Plaintiff who failed to timely provide the required sworn statement without showing good cause would be barred from presenting evidence or testimony regarding the small vehicle exception. This potential sanction would apply unless there was some other evidentiary basis for establishing a Plaintiff’s invocation of the exception. 

    Next, the Court addressed the admissibility of Plaintiffs’ estimated hours-worked chart attached to their supplemental disclosures. The Court agreed with Absopure that the chart constituted inadmissible hearsay under Rule 801, noting that Plaintiffs did not dispute this characterization or indicate an intent to admit the chart into evidence. Because the chart was hearsay and did not fall under any recognized hearsay exception, the Court ruled the chart inadmissible as evidence at trial. However, the Court stated Plaintiffs could potentially use the chart as a demonstrative exhibit to illustrate evidence properly admitted at trial. If Plaintiffs wished to use the chart for this limited purpose, the Court instructed them to file a motion setting forth the proposed use and supporting authority. 

    Absopure had argued that Plaintiffs’ expert, Martin Williams, should not be allowed to testify because his expert report summarizing his likely testimony regarding Plaintiffs’ damages relied on their inadmissible hours-worked chart and was based on what they considered “pure speculation.” The Court had agreed with Absopure to some extent, noting that Martin Williams’ intended testimony would lack a proper evidentiary basis at trial.

    Plaintiffs had correctly asserted that, according to Federal Rules of Evidence 703, an expert’s opinion did not necessarily need to rely on admissible evidence to be admissible. However, the Courts had discretion under the Federal Rules of Evidence to exclude expert opinion testimony if it was based entirely on speculation. In this case, the expert report of Martin Williams had generated calculations based on (i) the expert’s review of the estimated hours-worked chart and (ii) assumed workdays ranging from 9 to 12 hours. The report had calculated Plaintiffs’ “total unpaid overtime premiums and liquidated damages” based on this estimated hours-worked chart.

    The Court had emphasized that expert testimony must have an evidentiary basis to be considered sufficiently reliable and not speculative. Therefore, the Court had determined that it should wait to see what evidence would be presented at trial. If evidence establishing a factual basis was presented, the expert’s testimony might be deemed reliable. At that point, it was considered premature to bar him from testifying.

    Held

    The Court granted in part and denied in part Defendant Absopure Water Company, LLC’s motion to exclude Plaintiffs from presenting at trial 1) any testimony or evidence related to the Small Vehicle Exception to the Motor Carrier Act, 2) Exhibit A to their Third Supplemental Initial Disclosures consisting of Plaintiffs’ estimated hours-worked chart, and 3) the purported expert testimony of Martin Williams.

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

    Key Takeaways:

    • Expert opinions must have a reliable factual basis to be admissible. If the facts underlying the opinion are too speculative or unreliable, the testimony must be excluded.
    • According to Federal Rules of Evidence 703, an expert’s opinion need not rely on admissible evidence to be admissible. An expert may base an opinion on facts or data in the case that the expert has been made aware of or personally observed. If experts in the particular field would reasonably rely on those kinds of facts or data in forming an opinion on the subject, they need not be admissible for the opinion to be admitted.
    • Because the expert’s testimony must have an evidentiary basis to take it out of the realm of speculative testimony and render it sufficiently reliable, the Court must await what evidence is presented at trial. If evidence is presented that establishes a factual basis, the expert’s testimony may well be reliable.