Expert Witness Profiler

Tag: Reasonable Fee

  • Experts are entitled to a reasonable fee despite objections to the admissibility of their opinions

    Experts are entitled to a reasonable fee despite objections to the admissibility of their opinions

    In February 2016, Plaintiffs-Appellants Scott Miller and Michael Spaulding, two Seattle Police officers, fatally shot Che Andre Taylor, a Black man, as they tried to arrest him. Four days after the shooting, Defendant-Appellee Kshama Sawant, then a member of the Seattle City Council, told a crowd of protestors in front of the Seattle Police Department Headquarters that Taylor’s shooting was a “blatant murder at the hands of the police.” Following an inquest into Taylor’s killing, prosecutors declined to file criminal charges against Miller and Spaulding on the ground that there was insufficient evidence to prove that they killed Taylor with the requisite “malice” to be guilty of criminal homicide, as required by Washington law. Roughly three months after the inquest concluded, Sawant told a crowd of protestors that Taylor was “murdered by the police.”

    Miller and Spaulding filed suit in federal court, alleging state law claims for defamation and outrage (i.e., intentional infliction of emotional distress), as well as “federal defamation,” against Sawant.

    The district court dismissed the “federal defamation” claim when it granted Sawant’s motion for partial judgment on the pleadings, but chose to exercise supplemental jurisdiction over the remaining state law defamation and outrage claims. The district court granted Sawant’s motion for summary judgment as to the state law defamation and outrage claims, and Miller and Spaulding appealed the district court’s grant of that motion.

    The appellate court affirmed the district court’s grant of Sawant’s motion for summary judgment but considered whether the district court erred when it granted Sawant’s motion for recovery of expert witness deposition expenses, which included fees for time spent in preparation for deposition.

    Law Enforcement Expert Witness

    Professor Gregory Gilbertson (Ret.) is an expert witness in police practices. He specializes in police use of force, false arrest, officer misconduct, criminal and self-defense casework. He is also a former SWAT team officer, senior patrolman, stakeout squad officer, juvenile investigator, school resource officer, private investigator, and Guardian ad Litem. 

    Get the full story on challenges to Gregory Gilbertson’s expert opinions and testimony with an in-depth Challenge Study. 

    Law Expert Witness

    Lisa Daugaard is an American criminal justice reform activist. She is the director of the nonprofit organization Public Defender Association and a commissioner of the Community Police Commission in Seattle. She received a 2019 MacArthur Fellowship for her criminal justice reform work.

    Want to know more about the challenges Lisa Daugaard has faced? Get the full details with our Challenge Study report. 

    Discussion by the Court

    Sawant sought payment of the fees her expert witnesses had incurred in responding to Miller and Spaulding’s discovery

    In December 2022, Miller and Spaulding deposed two witnesses who Sawant identified as experts in her initial disclosures. Sawant had retained the identified experts as potential defense witnesses. That same month, Sawant sent Miller and Spaulding the experts’ invoices and requested payment for the fees her expert witnesses had incurred in responding to Miller and Spaulding’s discovery, including time spent preparing for the deposition. Sawant sought payment of the fees pursuant to Federal Rule of Civil Procedure 26(b)(4)(E).

    However, Miller and Spaulding failed to provide payment. Sawant covered the costs after Plaintiffs refused to pay, and filed a motion to compel payment.

    As relevant here, the expert witness deposition fees Sawant sought included compensation for time the witnesses had spent preparing for their depositions.

    Specifically, Sawant sought $1,367.50 for Professor Gregory Gilbertson’s expert witness deposition fees and $1,770.00 for Lisa Daugaard’s expert witness deposition fees.

    In June 2023, the district court granted Sawant’s motion, noting there is no clear guidance from the Ninth Circuit regarding whether the reimbursement of preparation time is permitted under Rule 26, but concluding that Sawant’s request was reasonable, that awarding the fees “falls squarely within the ambit of Rule 26(b)(4)(E),” and that no manifest injustice would result from awarding the fees.

    Miller and Spaulding’s objected to the admissibility of Daugaard’s opinions

    Miller and Spaulding argued that the district court erred when it granted Sawant’s motion for Daugaard’s expert witness deposition expenses without first assessing whether she qualified as an expert under the Federal Rules of Evidence and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993).

    To begin with, the plain text of Rule 26 provides that a district court “must require” that a deposing party pay “a reasonable fee for time spent in responding to discovery” by “an expert whose opinions may be presented at trial.” The Court held that Miller and Spaulding’s objection to the admissibility of Daugaard’s opinions did not obviate their obligation to pay Daugaard a reasonable fee under Rule 26.

    Expert witness deposition preparation fees that were awarded to Sawant were reasonable and their award did not result in manifest injustice

    Miller and Spaulding also argued that the district court erred when it granted Sawant’s motion for expert witness deposition fees for Gilbertson’s and Daugaard’s time spent preparing for their depositions. That is, Miller and Spaulding maintained that Rule 26(b)(4)(E) permitted expert fees only for time spent during a deposition, and not for time spent preparing for a deposition.

    The Court held that Miller and Spaulding’s suggestion that such fees are never recoverable cannot be squared with Rule 26’s plain text, which requires the “party seeking discovery” to “pay the expert a reasonable fee for time spent in responding to discovery under Rule 26(b)(4)(A).”

    Moreover, Miller and Spaulding raised several policy concerns based on “costs and incentives” and “the potential for abuse” if deposition preparation fees are recoverable. But the policy concerns they raised are addressed by Rule 26’s existing textual limitations on recoverable fees: namely, that fees must be “reasonable,” and their award must not result in “manifest injustice.” Gilbertson spent only 2.5 hours preparing and Daugaard only 2.2 hours, and Miller and Spaulding did not contest the fairness of Gilbertson’s and Daugaard’s hourly rates.

    Held

    In conclusion, the appellate court concluded that the district court did not err when it granted Sawant’s motion for recovery of her expert witnesses’ deposition fees.

    Key Takeaway:

    Therefore, the plain text of Federal Rule of Civil Procedure 26 allows for the recovery of reasonable expenses for the time an expert witness, whose opinions may be presented at trial, spends preparing for a deposition. Plaintiffs’ objection to the admissibility of the expert’s opinions did not obviate their obligation to pay the expert a reasonable fee under Rule 26.

    Case Details:

    Case Caption: Scott Miller V. Kshama Sawant
    Docket Number: 2:18cv506
    Court: United States Court of Appeals for the Ninth Circuit
    Order Date: August 22, 2024
  • Retirement Plan Expert Witness’ Recordkeeping Fees Calculation Rejected

    Retirement Plan Expert Witness’ Recordkeeping Fees Calculation Rejected

    A district judge in Pennsylvania refused to admit the Retirement Plan Expert’s opinions on “excessive” recordkeeping fees being charged.

    Plaintiff, John McCauley accused PNC Financial Services Group and a Committee appointed to oversee the administration of PNC’s 401(k) Plan of breaching their fiduciary duties under ERISA by allowing the Plan to pay “excessive” fees to the Plan’s recordkeeper, Alight.

    McCauley sought to introduce Ty Minnich as an expert witness who would provide opinions on the following topics: (1) whether Alight charged excessive recordkeeping and administrative fees; (2) what the reasonable market rate for the Plan’s services would be; and (3) the amount of Plaintiffs’ damages. 

    PNC sought to exclude Minnich’s expert testimony, arguing that it was not reliable because his opinion was based solely on his experience “without [using] any reproduceable or traceable process.” 

    Retirement Plan Expert Witness

    Ty Minnich has 30 years of experience as a financial services professional, during which he specialized in 401(k) and 403(b) retirement plans and the applicable fiduciary duties. For the past 15 years, he has been responsible for overseeing and conducting requests for proposals (“RFPs”) and pricing processes in the industry.

    Want to know more about the challenges Ty Minnich has faced? Get the full details with our Challenge Study report. 

    Discussion by the Court

    Minnich’s Opinion on the Reasonable Market Rate

    Minnich asserted that he based his expert opinion on his industry experience and three pertinent factors: participant count, the services provided, and any ancillary revenue.  He maintained that the first factor was the most important, explaining that “[w]hen the number of participants increase, the necessary recordkeeping fees would exponentially decline.” 

    He further noted that in his industry experience, recordkeepers often create a pricing curve based on participant count and per person fees to determine the reasonable market rate. Minnich, however, did not create a pricing curve in this case.

    He opined that the Plan received no services out of the ordinary that would have contributed to an increased price. Minnich also explained that an affiliate of the Plan’s recordkeeper received over $2.2 million in direct compensation in 2020. 

     He noted that this additional revenue stream meant that the recordkeeper “would likely have provided [] services to the Plan for substantially less throughout the Class Period had the Plan fiduciaries negotiated to achieve the reasonable market rate.”

    Minnich, however, did not explain whether the recordkeeper received additional revenue in years other than 2020, and by how much exactly this compensation would have decreased the per person fees paid. 

    The Court held that Minnich’s opinions were based on his subjective belief and experience and, therefore, he has not demonstrated that it is more likely than not that his testimony is the product of reliable principles and methods. For instance, Minnich did not create a pricing curve—despite indicating this is the industry norm—nor could he point to any other reliable methodology or scientific procedure he used to calculate his reasonable fees. 

    Minnich’s Opinion that PNC could have negotiated lower recordkeeping fees

    Minnich’s Report also pointed to four other retirement plans that he believed were comparable to the Plan and demonstrated that PNC “could have negotiated far lower recordkeeping fees.” 

    The Court found, however, that these four comparator plans did not salvage the reliability of Minnich’s opinion.

    Minnich’s Opinion as to the Amount of Damages

    Minnich further opined that, based on his reasonable fee calculations, the amount of damages in this case was $25,122,422. But because Minnich’s reasonable fee calculation was based on an unreliable methodology, the Court found that his opinion as to the amount of damages was also unreliable and should be excluded.

    In addition to the motion to exclude Minnich’s testimony, PNC also filed a motion for summary judgment on McCauley’s claims. The Court also granted PNC’s motion for summary judgment.

    Held

    The Court denied the motion for summary judgment and motion to exclude the testimony of Ty Minnich, entering the final judgment in favor of PNC Financial Services Group, Inc.

    Key Takeaway:

    Minnich not only failed to identify a reliable methodology or process he used to calculate the reasonable market fee, he also chose his comparator plans with fees that supported his calculation. The Court found that Minnich’s comparator plans did not support the reliability of his methodology.

    Case Details:

    Case Caption: John Mccauley V. PNC Financial Services Group, Inc. Et Al
    Docket Number: 2:20cv1493
    Court: United States District Court for the Western District of Pennsylvania
    Order Date: June 21, 2024