Author Archives: T.C. Kelly

About T.C. Kelly

Prior to his retirement, T.C. Kelly handled litigation and appeals in state and federal courts across the Midwest. He focused his practice on criminal defense, personal injury, and employment law. He now writes about legal issues for a variety of publications.

Accident Reconstruction Experts Testify in Wrongful Death Trial

Accident reconstruction experts who testified in a wrongful death trial provided differing opinions about responsibility for a 2012 traffic accident that claimed the life of an 84-year-old man in Anniston, Alabama. A lawsuit filed by William Curry’s estate claimed that a speeding police officer negligently caused the crash. Attorneys for the city argued that the accident was Curry’s fault.

Trial testimony unfolded over 5 days in Calhoun County Circuit Court. A few fundamental facts were uncontested. Officer Thomas Anthony Gassaway, who subsequently left the employment of the City of Anniston, observed a car driving at 62 mph on a street that had a 35 mph speed limit. Gassaway pursued the speeding car.

As Gassaway traveled through an intersection, he collided with Curry’s car. Curry died 78 days after the collision.

Disputed Facts

Most of the critical facts concerning the cause of the accident were disputed. A key issue was whether Gassaway activated his lights and siren. An Alabama law requires police officers to use their flashing lights and sirens when they exceed the speed limit while pursuing a suspect. Gassaway claimed he flipped the switch that activated the lights and that an airbag struck him as soon as he did so.

Gassaway’s testimony seemed to find support in photographs of the accident scene showing the switch for the lights and siren in the “on” position. However, none of the witnesses to the accident saw the squad car’s lights or heard its siren.

Roy Bennett, Anniston Police Department’s lead traffic homicide investigator in 2012, took the pictures. He testified that he did not touch the switch after the accident and said he had “no reason to believe” that anyone else did so.

Video from the squad car’s dash camera might have shed light on the facts surrounding the accident, but no video was available. Gassaway testified that he was “informed that during the accident, the sudden loss of power corrupted the video.” The conveniently erased video, combined with evidence that the squad car’s lights and siren did not activate even though the switch was in the “on” position, may have caused the jury to doubt the credibility of the city’s accident investigation.

Curry’s Expert

In addition to eyewitnesses, lawyers for the Curry estate relied on the expert testimony of Georgia State Patrol Sgt. Tommy Sturdivan, who operates an accident reconstruction business. Sturdivan used digital technology to recreate the accident scene. He gathered data from modules in each vehicle that recorded the speeds at which they were traveling.

Sturdivan testified that Curry would have had ample time to cross the intersection if Gassaway had been driving at the speed limit. According to Sturdivan, it would not have been necessary for Curry to yield to Gassaway if Gassaway had been traveling at 35 mph.

Data from the module in the squad car revealed that Gassaway was driving at 61 mph, slowing to about 50 mph as he approached the intersection. The lawyers for Curry’s estate argued that Curry had no way to know that Gassaway was traveling so fast since Gassaway neglected to activate his lights and siren when he began to chase the speeder.

Sturdivan testified that an officer’s lights and siren are meant to protect the public by providing a warning that an officer is traveling above the speed limit. Sturdivan also testified that Gassaway was exceeding the speed limit for at least 6 seconds before he entered the intersection. According to Sturdivan, that have Gassaway ample time to warn cross-traffic by activating his lights and siren.

Sturdivan questioned whether a power loss during the crash would have wiped the digital recording made by the dash cam computer. He testified that camera data is written to a hard drive and then transferred to removable storage after the lights are turned off. Even if the removable disk was blank, the data should still have been on the hard drive. When he asked to inspect the hard drive, however, he discovered that all of the recording equipment had been removed from the car. The city apparently failed to preserve that evidence for use in the trial.

City’s Expert

Testifying as a reconstruction expert for the city, Pam Stirling told the jury that Curry caused the accident. Based on her review of the information in the module attached to Curry’s car, Stirling concluded that Curry “gunned it” (accelerated quickly) as he tried to cross the intersection. She inferred from that data that Curry saw Gassaway coming and tried to beat him across the intersection. She testified that Curry should instead have yielded to Gassaway.

Stirling acknowledged that Gassaway’s high rate of speed contributed to the severity of the crash, but she denied that it caused the crash. She also expressed the opinion that any violation of the state law requiring Gassaway to activate his lights and siren was not relevant to the accident.

The Verdict

Even if Curry’s negligent conduct contributed to the accident, the jury was instructed that it could overlook that negligence if Gassaway engaged in wanton behavior. The attorneys for Curry’s estate argued that Gassaway’s failure to comply with state law by activating his lights and siren before speeding constituted wanton behavior.

The city relied heavily on its expert in arguing that Gassaway was in the process of activating his lights and siren and that the accident would not have occurred if Curry had not tried to beat Gassaway across the intersection. The jury evidently found the testimony of the estate’s expert to be more persuasive. It returned a verdict in favor of Curry’s estate for $500,000.

Experts Are Key to Animal Cruelty Charges Against Terrence Cody

Terrence Cody, the former nose tackle for the Baltimore Ravens, is facing animal cruelty charges in Baltimore County. The Ravens released Cody from his contract on the day he was indicted by a grand jury.

Expert witnesses will play a key role in establishing that Cody’s Canary Mastiff starved to death. The defense is unlikely to question the cause of the dog’s death, but is denying that Cody intended for the dog to die.

Charges Against Cody

Cody was charged with two felony counts of aggravated animal cruelty. Each count carries a maximum potential prison sentence of three years. Cody was also charged with five misdemeanor counts of animal abuse or neglect, each carrying a potential maximum jail sentence of ninety days.

The indictment alleges that Cody tortured the dog and intentionally killed it in a cruel manner. Unlike Michael Vick, Cody has not been accused of dog fighting.

In addition to accusations concerning his dog, Cody was charged with illegal possession of an alligator and with five counts of abuse or neglect of the alligator. Those offenses are all misdemeanors. Cody is also charged with misdemeanor possession of marijuana and drug paraphernalia.

Cody’s girlfriend, Kourtney J. Kelley, has also been charged. Kelley claims that the animals belonged to Cody and that she was not responsible for them.

At the time of Cody’s indictment, Cody’s lawyer told the media that Cody was a “quality young man who’s a true animal lover.” Asserting that Cody would never hurt a fly, much less his pet, the attorney also said that the dog was Cody’s favorite animal. Perhaps due to expert witness testimony, Cody’s lawyer has changed his approach to the defense.

Expert Testimony

Cody brought the dog to an animal hospital in Reisterstown for treatment. At that point, it was too late to save the dog, who died from malnutrition a few hours later.

Reisterstown veterinarian Dr. Eddie Molesworth treated the dog but was unable to save its life. He testified that he thought the dog was dead when Cody brought it to the animal hospital. The dog weighed about 50 pounds, less than half the weight of a healthy Canary Mastiff.

Another expert witness for the prosecution, forensic veterinarian Dr. Martha Smith-Blackmore, testified that the dog had probably been neglected for at least four weeks. She confirmed that starvation was the cause of the dog’s death.

Cody’s Defense

Probably realizing that the expert testimony was unassailable, Cody’s defense attorney conceded in his opening statement that Cody neglected the dog. That concession will likely assure a conviction on one or more of the misdemeanor counts.

Cody’s defense to the felony is that his neglect of the dog did not rise to the level of intentional abuse. Pointing out that Cody paid $4,000 for the dog and another $4,000 to bring the dog to the United States from Spain, Cody’s lawyer told the court that Cody did not intend the dog’s death.

Cody’s attorney also pointed out that Cody brought the dog to the veterinary hospital for treatment. That action is arguably inconsistent with an intent to cause the dog’s death.

On cross-examination, Dr. Molesworth testified that Cody put his head down and cried when he was told of his dog’s death. The defense will likely use that testimony to bolster its argument that Cody cared about the dog and had no intent to harm it.

Perhaps because animal cruelty is such an emotional issue, both defendants waived their right to a jury trial. Whether the prosecution can establish Cody’s guilt on some or all charges will be decided by the judge who is presiding in the trial.

Are Disputed Expert Opinions Sufficient Proof of Fraud Under the False Claims Act?

A federal judge in the Northern District of Alabama has ruled that a difference of opinion among medical experts is not sufficient to prove that a healthcare provider filed false claims for Medicare payments. If that decision is adopted by other courts or affirmed on appeal, the government’s ability to bring false claim lawsuits that rely entirely on expert testimony will be severely undermined.

Whistleblower Claims Against AseraCare

The decision came in a whistleblower lawsuit filed against AseraCare, a hospice provider that has facilities in 19 states. AseraCare has received millions of dollars in Medicare payments that the Department of Justice (DOJ) contends were the result of fraudulent claims. It is seeking more than $200 million in damages for payment of Medicare claims that it alleges to be false.

Medicare pays for hospice care, including care provided by a hospice inpatient facility, if a hospice doctor certifies that the patient’s life expectancy does not exceed six months. Hospice benefits are available only to terminally ill patients who have elected to seek comfort care rather than treatment for their illness.

Whistleblowers notified the DOJ that AseraCare received Medicare payments for a number of patients who survived in hospice facilities for more than six months. A DOJ investigation concluded that AseraCare was falsely certifying patients as eligible for hospice care in order to collect Medicare payments for patients who were not entitled to hospice coverage.

The AseraCare Lawsuit

The lawsuit was initiated by two former employees of AseraCare who alleged that they were pressured to admit patients for hospice care who did not need end-of-life treatment. The lawsuit was based on the False Claims Act, a federal law that prohibits the submission of fraudulent claims for payment to federal agencies. The False Claims Act permits whistleblowers who report fraud to the government to share in the damages that the government recovers. The DOJ intervened in the litigation, taking the lead role in prosecuting the allegations.

The judge made the unusual decision to divide the liability portion of the trial into two phases. The first phase asked the jury to decide whether the claims were objectively false. In the second phase, the jury would be asked whether AseraCare knew the claims were false when they were submitted. During that phase, the jury would hear evidence that AseraCare pressured doctors and nurses to sign up patients for Medicare-funded hospice care.

Experts testified for both DOJ and AseraCare during the trial’s first phase. The DOJ’s expert concluded that 121 AseraCare patients had been certified as eligible for Medicare coverage when their medical records established that they were likely to live longer than six months. After considering the conflicting testimony at trial, the jury decided that 104 of the 121 patients were ineligible for Medicare coverage.

On the day the second phase of the trial was scheduled to commence, however, the judge granted a new trial on the first phase. The judge decided that she erred by failing to give the jury complete and accurate instructions concerning the False Claims Act. In particular, she decided that she should have instructed the jury that claims are not false if reasonable persons could disagree about whether the claims were legitimate.

Disagreement Among Experts

The new trial may never occur in light of the judge’s most recent concern about the government’s case. The judge has ordered the DOJ to identify the evidence it presented during the two month trial, apart from a difference of medical opinions as to whether AseraCare’s patients were terminally ill, to prove that AseraCare made false claims for Medicare payments.

The judge noted that this is not a case in which the hospice owner forged physicians’ signatures, gave false information to physicians who certified Medicare eligibility, billed for services that were not rendered, or submitted claims for fictitious patients. Fraud in those instances is clear. The legal standard for proving fraud when a doctor certifies that a patient will probably die within six months and turns out to be wrong is less certain.

The judge ruled that an “expert’s opinion disagreeing with the clinical judgments of the certifying physicians, without more, is not enough to prove falsity” under the False Claims Act. Since the government agreed to prove that the claims were false without relying on the testimony of the whistleblowers or on other evidence that doctors were pressured to admit patients to hospice care who were not eligible for Medicare hospice coverage, the government may not be able to show that it met its burden of proving falsity without relying on the testimony of its expert. If the judge decides that the government did not prove the claims were objectively false, the case will be dismissed.

Perhaps the court is correct that a “mere difference of opinion” is not enough to prove that a certification is false. Experts commonly disagree, and it would not be surprising for two experts to make different predictions of mortality based on their review of the same medical records. On the other hand, if one expert testifies that no reasonable physician could certify a particular patient was eligible for Medicare-funded hospice care, and if a jury could find that expert’s testimony to be credible, that seems like the kind of expert testimony upon which juries commonly rely in resolving disputed facts.

Opinion is divided among lawyers who handle False Claims Act cases whether an expert’s opinion that medical records did not support certification of eligibility for Medicare-funded hospice care is sufficient proof that the certifications were false. The question may ultimately need to be settled by the Court of Appeals for the Eleventh Circuit or by the Supreme Court.

Expert Opinions Conflict in Benzene Exposure Claim

Last year, a worker’s compensation court in Louisiana rejected a worker’s claim that exposure to benzene caused him to suffer from non-Hodgkin’s lymphoma. The Louisiana Court of Appeal recently affirmed that decision. A key issue on appeal was whether the worker’s compensation court gave due attention to the conflicting opinions of expert witnesses.

The Benzene Controversy

Benzene is widely used in the production of lubricants, plastics, pesticides, adhesives, and other common household products. Employees who work with chemicals in manufacturing plants may be at risk from occupational exposure to benzene.

Outside of the workplace, the most common sources of benzene exposure are cigarette smoke, gasoline, vehicle exhaust, and industrial emissions. Within the home, paints, furniture wax, and glues are among the products that might lead to low levels of benzene exposure.

Long-term exposure to benzene can harm bone marrow and lead to decreased production of red blood cells. Whether benzene exposure causes cancer has been the subject of some controversy. Over time, however, a number of agencies that conduct health research, including the World Health Organization, the National Toxicology Program, and the Environmental Protection Agency, have concluded that benzene is a human carcinogen.

Allensworth’s Claim

David Allensworth cleaned storage tanks for Gulf South Systems and later for Grand Isle Shipyard. The tanks contained petroleum products, including gasoline, diesel fuel, and crude oil. Allensworth entered the tanks and cleaned chemical residue by hand, using suction hoses, pressure washers, scrapers, and similar equipment.

Allensworth wore a respirator and an air mask, as well as rubber gloves and a Tyvek suit, when he entered the tanks. He testified that the suits often ripped, exposing his skin to the contents of the tank, including sludge, fumes, and chemical residue. He also testified that he breathed chemical fumes when he was outside the tank and not wearing a respirator.

Allensworth noticed a variety of symptoms during his twelve-hour shifts, including nausea, vertigo, and headaches. He did not seek medical attention for those symptoms. He also smoked a pack of cigarettes each day.

About three months after Allensworth’s last employment, he visited a clinic because he was experiencing abdominal pain. He was later diagnosed with non-Hodgkin’s lymphoma. Although the cancer is in remission following treatment, Allensworth is unable to work. He filed a worker’s compensation claim, contending that exposure to benzene at his workplaces resulted in a disability.

Expert Opinions

At his worker’s compensation trial, Allensworth submitted an affidavit of Dr. Jack Saux as an expert oncologist. Dr. Saux expressed the opinion that Allensworth’s non-Hodgkin’s lymphoma was more likely than not caused by toxic exposure to benzene in gasoline and crude oil.

Dr. Saux did not personally examine Allensworth. He relied instead on information supplied in an affidavit that Allensworth prepared, on Allensworth’s medical records, on studies documenting the relationship between benzene exposure and non-Hodgkin’s disease, and on studies regarding benzene exposure and tank cleaning.

The employers both relied on the expert testimony of Dr. William Nassetta. While Dr. Nassetta acknowledged the association between benzene and lymphoma, he testified that benzene does not cause lymphoma and therefore could not have been the cause of Allensworth’s disease. Dr. Nassetta also opined that, even if benzene could cause cancer, Allensworth’s use of a respirator and Tyvek suit broke the causal connection between benzene exposure and cancer by denying a pathway for benzene to have a toxic effect.

The worker’s compensation court accepted Dr. Nassetta’s testimony and rejected the opinion expressed by Dr. Saux. It accordingly denied Allensworth’s claim for compensation. Allensworth appealed, claiming that the worker’s compensation judge did not decide the dispute between the experts correctly.

Resolution of Appeal

The court of appeals noted that expert testimony is required to support a finding of occupational disease. When expert testimony is in conflict, it is the duty of the worker’s compensation judge to determine whether the evidence presented by the employee establishes that the employee’s disease was caused by his employment. The appellate court does not second-guess that determination, provided that the judge exercised appropriate discretion in reaching a decision.

The appellate court decided that it was reasonable for the worker’s compensation judge to give less weight to Dr. Saux’s opinion because Dr. Saux’s knowledge of Allensworth’s benzene exposure was limited to the information that Allensworth stated in his affidavit. That affidavit claimed that Allensworth wore only coveralls and a regular shirt when he cleaned the tank. Had Dr. Saux known that Allensworth regularly wore a respirator and a Tyvek suit, he might have formed a different opinion.

In addition, the worker’s compensation judge was entitled to credit Dr. Nassetta’s opinion that Allensworth’s history of smoking and his family history of cancer were greater risk factors for the development of cancer than his exposure to benzene. The judge was also entitled to accept Dr. Nasetta’s testimony that Allenworth’s Hepatitis C could have caused his non-Hodgkin’s lymphoma.

Expert Opinions in Affidavits

Because there was a reasonable basis for the judge’s ruling, the appellate court rejected Allensworth’s appeal. One lesson to be learned is that experts should be given as much information as possible before they render an opinion. If Dr. Saux had known about Allensworth’s use of a respirator and Tyvek suit, he could have accounted for those facts in his affidavit.

A second lesson is that, in proceedings where evidence can be presented by affidavit, there may be an advantage to presenting live or deposition testimony instead. If Dr. Saux had been cross-examined about Allensworth’s smoking or his Hepatitis C, Dr. Saux could have explained why those factors were less likely to have caused non-Hodgkin’s lymphoma than exposure to benzene. Presenting opinions in the form of an affidavit makes it impossible for an expert to counter unanticipated arguments that are presented in opposition to the expert’s opinion.

Four Qualities That Made Ben Carson an Effective Expert Witness

Donald Trump may have celebrity status, but Ben Carson is the current frontrunner in a poll of GOP primary voters. The reasons that underlie his popularity as a presidential candidate, including the ability to gain the trust of his audience, also explain Dr. Carson’s success as an expert witness.

Before he began to campaign as a presidential candidate, Dr. Carson was the director of pediatric neurosurgery at Baltimore’s Johns Hopkins hospital. He gained professional recognition as the first surgeon to perform a successful separation of twins who were conjoined at the head. Dr. Carson’s status as a renowned neurosurgeon made him a logical choice to testify as an expert witness in high dollar cases.

According to an article in The New York Times, Dr. Carson served as an expert in 20 to 30 cases, charging $500 to $750 per hour to review records and prepare opinions and $2,500 for a half day of testimony. Lawyers, judges, and jurors credit his testimony for successful verdicts.

Reading the Times story for its portrait of a Dr. Carson as an expert witness rather than a politician sheds light on the characteristics that make an expert effective. Four qualities that the article spotlights are gravitas, clarity, objectivity, and empathy.

Gravitas

The best experts radiate a sense of professionalism, authority, and integrity. Their manner of testifying assures jurors that they are both knowledgeable and honest.

Trial participants who heard Dr. Carson testify attribute those qualities to him. Even a plaintiff who sued paramedics, claiming they had worsened injuries that were inflicted by the police, admitted to being a little in awe when Dr. Carson testified on behalf of the paramedics. Dr. Carson’s testimony, attributing the cause of the plaintiff’s spinal injuries entirely to the force used by the police, was the key to a verdict that imposed no liability upon the paramedics.

Jurors in that case shared the plaintiff’s respect for Dr. Carson, as did the judge, who told the Times that it is “rare to see that kind of gravitas given to an expert witness.” The judge noted that the jury paid “rapt attention” to Dr. Carson’s testimony. One juror told the Times that the jury thought Dr. Carson “was the cat’s meow.”

Clarity

Part of Dr. Carson’s success as a witness, according to the Times, stemmed from his ability to explain difficult medical concepts in clear language the lay jurors could understand. For example, he described the “spinal dura” to a jury as “a leather-like covering over the brain and spinal cord.” That metaphorical description made it easy for the jurors to picture something they had never seen.

At the same time, Dr. Carson did not “dumb down” his testimony in a way that jurors might have regarded as condescending. Using words like “laudatory” and “capacious” during his testimony sent a clear message that he was an articulate and intelligent witness who respected the jury’s ability to understand his rich vocabulary.

Objectivity

In his book America the Beautiful, Dr. Carson wrote that he tried to be “very cooperative, accommodating, and pleasant to the opposing attorneys” while exposing “the folly of their argument before the jury.” Avoiding the appearance of taking sides is a key to earning a jury’s trust.

Dr. Carson usually testified for defendants, but he testified for the plaintiff in some egregious cases of medical malpractice. Testifying for both plaintiffs and defendants in civil cases, and for the prosecution and defense in criminal cases, helps an expert avoid being pigeonholed as a “hired gun” for one side or the other.

Dr. Carson told the Times that he has good relationships with health care professionals and with injury victims. His willingness to testify “for whoever is right” enhanced his credibility with juries.

Empathy

Objectivity is not the same as detachment. Jurors have difficulty connecting with experts who come across as aloof. Jurors like to know that experts care about the people they’ve chosen to stand up for in the courtroom.

As a surgeon, Dr. Carson prided himself on becoming close to his patients. His empathy comes across to juries. Empathy makes him effective as a doctor, as an expert witness, and as a politician. Even a former patient who sued Dr. Carson for malpractice said that she would still vote for him. By the same token, juries based their votes on Dr. Carson’s testimony, in part because they viewed him as an expert who cared.

 

Photo Credit: “Ben Carson” by iprimages is licensed under CC BY-ND 2.0.

Jury Considers Expert Opinions in Awarding Sexual Assault Damages

A Los Angeles jury apparently accepted the testimony of one expert and rejected that of another in awarding $3 million to each of two boys who were sexually abused by their third grade teacher. The school district that employed the teacher admitted responsibility for the sexual assaults.

Negligent Hiring and Supervision

Paul Chapel III was fired by a different school district in 1987 for making sexual jokes to students and showing them a sexually explicit video. Chapel lost a civil lawsuit as the result of that conduct. The Los Angeles Unified School District (LAUSD) nevertheless hired Chapel in 1988.

Several years after he began working for the LAUSD, Chapel was prosecuted for molesting an 8-year-old during a sleepover. His teaching credentials were suspended and Chapel was transferred to an administrative position. His trial on the molestation charge ended with a hung jury. The District gave Chapel a new teaching position after his teaching credentials were reinstated.

Chapel was eventually arrested for sexually abusing four of his students. He was charged with thirteen counts of committing lewd acts against them. A judge sentenced him to 25 years in prison.

Two of those students sued the school district for negligence in hiring, retaining, and supervising Chapel. The lawsuit alleged that the school district ignored complaints it received from parents and other teachers about Chapel’s inappropriate conduct with students and failed to warn parents about those complaints.

The school district admitted its negligence. It contended, however, that the two students had already suffered psychological injury from other sources. It offered the parents of each child less than a half million dollars to settle their claims. The case went to trial when the plaintiffs rejected that offer.

Expert Testimony

The peril of using expert testimony to blame the mental health problems of sexual assault victims on other causes was highlighted by the LAUSD trial. In an attempt to minimize the emotional damage that the boys experienced, the school district relied upon a psychologist who is an expert in child trauma. Janine Shelby, an associate professor at the Harbor-UCLA Medical Center, interviewed the two boys. She blamed the psychological problems that plague one of the boys on his exposure to domestic violence between his parents, his mother’s postpartum depression, racism, and the death of a stepfather. The boy had behavioral problems in pre-school and was diagnosed with Attention Deficit Hyperactivity Disorder (ADHD) in grade school.

During closing arguments, the attorneys for the boys criticized the district for attacking the boys with evidence of their prior disabilities. The jury may well have concluded that any trauma the boys experienced before they were molested made them more vulnerable to psychological damage caused by the molestations. Jurors may also have resented the implication that sexual assault victims who have suffered previous trauma deserve less compensation than victims who have not been previously traumatized.

Shelby also cited research to support her opinion that half of all trauma victims recover within three months. She admitted on cross-examination, however, that the research addressed adult responses to trauma and was not confined to sexual abuse victims.

The attorneys for the LAUSD criticized the plaintiffs’ expert, Beverly Hills psychiatrist Brian Jacks, for allegedly disregarding the research that Shelby cited. The district’s attorneys claimed that Jacks relied on his own “speculative” judgments about the impact of the sexual abuse on the young victims’ lives rather than research findings. While it is unclear how much weight the jury gave to the respective expert opinions, the size of the verdicts suggests that Jacks’ opinion, based on his assessment of the two boys, was more influential than opinions that Shelby based on research concerning the ability of other trauma victims to recover from their experiences.

Experts Will Guide Jury in First Anti-Spoofing Criminal Trial

Expert testimony is sure to play a key role in the first criminal trial based on the “anti-spoofing” legislation that was enacted as part of the Dodd-Frank Act in 2010. The trial involves allegations that the defendant, Michael Coscia, manipulated the commodities market by placing orders that he never intended to fulfill.

The Practice of Spoofing

Spoofing is a way of manipulating a trading market. The manipulator “spoofs” by placing an order that is not “bona fide” with the intent to affect the price of a stock, commodity, or currency. When the price changes in response to the “spoof” order, the manipulator cancels the order and places another order to take advantage of the new price. For example, a buy order will be followed by a sell order, which may be followed by alternating buy and sell orders as the price rises and falls.

Spoofing artificially alters market prices. In Michael Coscia’s case, Panther Energy Trading placed small orders to sell contracts in futures markets (including soybeans, natural gas, and copper). It then placed large orders to buy similar contacts at higher prices. The buy orders gave the impression that demand for the commodity was increasing, signaling rising prices and inducing buyers to purchase the contracts that Panther had offered for sale. Panther would then cancel its buy orders and repeat the sequence in reverse by placing a small buy order for the same commodity, followed by large sell orders that it intended to cancel.

The Commodities Future Trading Commission (CFTC) accused Panther of manipulating the market. Panther agreed to pay an administrative penalty of $2.8 million to settle administrative enforcement proceedings.

In addition to the CFTC, the Securities Exchange Commission and other regulatory agencies have pursued civil or administrative remedies, including trading bans, license revocations, and the assessment of financial penalties, against firms that engaged in the practice of spoofing. Day traders have been prime targets of enforcement actions.

Spoofing usually relies upon computer algorithms that place and cancel bids in milliseconds. High-speed, high-frequency trading has come to dominate markets, enhancing the possibility of market manipulation. Its proponents, however, see high-speed computerized trading as a legitimate investment tool.

Spoofing Charges Against Michael Coscia

Federal prosecutors filed criminal charges for violating anti-spoofing laws against Michael Coscia for Panther’s trading activities. The federal indictment alleges that Coscia used his high-speed trading scheme to make $1.6 million in just three months.

Making money is not illegal. Making money by spoofing, on the other hand, is a crime. Coscia’s jury will be the first to consider criminal charges for violations of the anti-spoofing law. Whether Coscia manipulated the market or pursued a legitimate investment strategy is the question the jury will be asked to resolve.

Expert Testimony at Coscia’s Trial

Expert testimony may play a vital role for both sides in Coscia’s trial. Since placing and cancelling orders is not itself illegal, the government’s proof hinges on convincing the jury that Coscia intended to cancel the orders in order to manipulate the market. Coscia claims that he merely engaged in common trading practices. He will likely rely on financial experts to explain to the jury the frequency with which buy and sell orders are cancelled.

Coscia also contends that he abided by the rules of the exchanges in which he placed the orders and blames regulators for failing to provide clear guidance to investors. To establish that he had no intent to violate the law, Coscia plans to call an expert to testify about the industry’s understanding of anti-spoofing legislation in 2011, when his trades took place. Whether the judge will permit the expert to provide the detailed testimony that Coscia seeks is not yet clear.

Prosecutors will also need to rely on experts to educate jurors about how trades are made in the commodities market and about the programming of the software that Coscia relied upon to make those trades. Another trader, Navinder Singh Sarao, has been charged with using market manipulation tactics that were responsible for the “flash crash” of 2010. Prosecutors are relying on the expert opinions of Terrence Hendershott, a professor at the University of California -Berkeley, to make their case against Sarao, who is confined in a London prison as he resists extradition to Chicago.

Expert Musicologists Duel in Big Pimpin’ Copyright Dispute

A federal judge recently dismissed a claim that Shawn Carter (better known to music fans as Jay Z) and Timothy Mosley (a music producer known as Timbaland) infringed a copyright by misappropriating “several notes of flute music” when they created the 1999 hit Big Pimpin’. Jay Z later spent $1 million to shoot a popular music video that contributed to the song’s commercial success.

The lawsuit was based on the claim that the flute notes infringe the copyright on Baligh Hamdi’s1957 song Khosara Khosara. The Egyptian composer’s nephew brought the infringement suit as the heir to Hamdi’s estate. Expert witnesses for both sides testified in an effort to persuade the jury that the sampling did not infringe a copyright.

Copyright Infringement Allegations

Jay Z acknowledges he was inspired by the beat of Khosara Khosara when music producer Timbaland played the flute notes for him. Within hours, Jay Z crafted a song that media accounts describe as a “raunchy ode to a promiscuous lifestyle.” The song “samples” the flute notes in Khosara Khosara.

Rap and hip-hop artists commonly “sample” music by incorporating a small piece of another song into music that they originate. Artists who sample typically start with a digital copy of notes in the song they are sampling. They might or might not alter the sample (by changing its tempo, for example) when adding it to their original creation.

When permission is given to sample, no copyright infringement occurs. Whether sampling without permission violates copyright law is not always clear, and the legal test may depend on the federal circuit in which the infringement lawsuit is commenced. The test often (but not always) asks whether the sample is too small to be important to the overall success of the new recording and whether the sample is significant to the listener’s appreciation of the new song.

While some artists view sampling as a tribute to the sampled work, others regard sampling as stealing. In fact, one of the first major cases to consider whether sampling constitutes copyright infringement begins with the words “Thou shalt not steal.” A key issue in the Big Pimpin’ trial was whether Jay Z and Timbaland stole the notes from Hamdi’s song or used them with permission.

Expert Testimony in the Big Pimpin’ Trial

Expert witnesses testified for both sides in the trial. A musicologist testified that four notes from Khosara Khosara are repeated throughout Big Pimpin’.

Scott Marcus, testifying as an expert for Hamdi’s nephew, said the notes were a significant part of Jay Z’s song. The defense countered that assertion with the expert testimony of musicologist Lawrence Ferrara, who described the notes as “trite, minimal,” and “fragmentary” compared to the song as a whole. He also testified that the sampled notes were “essential building blocks” of music and are not subject to copyright.

Timbaland testified that he created most of the beats for Big Pimpin’ before he added the notes from Khosara Khosara. He denied that the Khosara Khosara notes were a key to the song’s success.

Experts on Egyptian law also testified during the trial. In the end, none of the expert testimony carried the day, as the case was decided on a legal issue.

Case Dismissed

How the jury would have reconciled the conflicting expert opinions will never be known. When the trial ended, the judge decided that the evidence did not create a dispute that the jury needed to resolve.

Timbaland testified without contradiction that he paid $100,000 to EMI Arabia to acquire the right to sample Khosara Khosara. Timbaland made that payment after EMI Arabia asserted ownership of the song and complained that it was sampled without permission. Timbaland also testified that he believed he had purchased a valid license to use the flute notes when he settled EMI’s claim.

Hamdi’s nephew argued that the payment was irrelevant because Timbaland and Jay Z failed to obtain the family’s permission to combine the flute notes with the lyrics and melody in Jay Z’s song. The nephew also complained that Jay Z’s song was vulgar, but the song was never played in its entirety during the trial, so jurors were never exposed to lyrics they might have regarded as offensive.

Hamdi’s nephew contended that Egyptian law gave him a “moral right” to contest the derivative use of Hadmi’s song even if the nephew no longer owned rights to the song. After listening to the testimony of the Egyptian law experts, the judge ruled that Egyptian law did not apply and that Hamdi’s nephew lacked standing to sue since rights to the song were owned by EMI Arabia, not by the nephew. The judge therefore dismissed the lawsuit without sending it to the jury, leaving unresolved the issues about which the musicology experts testified.

Mental Status Testimony of Crime Scene Expert Challenged at Blagg Retrial

Michael Blagg was sentenced to life in prison after being found guilty in 2004 of murdering his wife as she slept. The death occurred in Grand Junction, Colorado. Last year, Blagg was granted a new trial after it was discovered that one of his jurors lied on a juror questionnaire when she claimed never to have been the victim of domestic abuse. The juror later appeared at a city council meeting as an advocate for battered women, where she told the council she had been an abuse victim for ten years.

At a hearing on Blagg’s motion for a new trial, the juror testified that she told the truth on her jury form but lied to the city council in order to make a point. That testimony was undermined by evidence that the juror stated during two divorce proceedings and in a restraining order hearing that she had been abused by her ex-husbands.

Unconvinced that the juror had never been an abuse victim, the court expressed concern that she may have made a decision to conceal her own experience with domestic violence in order to serve on Blagg’s jury. If the juror wanted to sit in judgment of Blagg because she had an agenda, she may have tainted other jurors. The potential violation of Blagg’s right to an impartial jury could only be remedied by a new trial. Several months after the judge granted Blagg a new trial, the juror was convicted of contempt of court for willfully lying on her juror questionnaire.

Blagg’s new trial is scheduled to take place next year. Before it starts, however, the court must decide whether an expert witness who testified in the first trial will be allowed to repeat his testimony.

Trial Evidence

Blagg’s trial lasted for 23 days. Much of the evidence focused on marital discord between Blagg and his wife. No eyewitness saw the murder. No physical evidence linked Blagg to the crime. Blagg’s daughter disappeared the night of his wife’s murder, although Blagg has not been charged with any crime concerning his missing daughter.

Physical evidence suggested that Blagg’s wife was shot in the face while she was in bed. Her body was discovered in a landfill. Prosecutors theorize that the body had been placed in a dumpster at Blagg’s place of business, although they have no witnesses to support that theory.

Controversial Expert Testimony

During the original trial, retired FBI crime scene investigator Ronald Walker testified as a crime scene expert. He told the jury that the murder appeared to be a “staged domestic homicide” and that the murderer had “a high comfort level” that “comes from having intimate familiarity with that house.”

The defense is objecting to the introduction of that testimony in the new trial on the ground that it is based on speculation rather than expertise. While the Colorado Court of Appeals found no error in the admission of that testimony during the first trial, that ruling merely acknowledged that the trial court did not abuse its discretion in permitting it. By the same reasoning, the court has discretion to bar the testimony in the new trial.

The defense is relying on a Colorado Supreme Court opinion that disapproved of “profile” evidence. In that case, the Supreme Court held that an expert could testify that a killing appeared to be a “sexual homicide” but could not testify that the defendant fit the profile of persons who commit sexual homicides.

Blagg’s lawyers are arguing that Walker is pointing a finger at Blagg by testifying that the crime was committed by someone “intimately familiar” with the house, a description that identifies Blagg and no other person. In that regard, they argue that Walker has created a profile and has improperly placed Blagg within the profile.

Crime Scene Expertise

The real question may be whether a crime scene expert is qualified to give testimony that seems more suited to a psychologist. Crime scene experts usually testify about how crimes occurred based on their reconstruction of the crime scene.

Testifying about how a crime probably occurred based on physical evidence is different from testifying about the mental status (in this case, “comfort”) of the person who committed the crime. Yet judges have sometimes permitted crime scene experts to delve into the minds of criminals and their victims. In the recent “American Sniper” trial involving the death of former Navy SEAL Chris Kyle, a crime scene expert testified that Kyle would have protected himself if he had seen the attack coming. Unlike Walker’s testimony, however, that opinion was at least arguably grounded in physical evidence recovered from the crime scene.

Can Expert Witnesses Be Sued for Careless Opinions?

Like everyone else, expert witnesses sometimes make mistakes. When those mistakes affect the outcome of litigation, they can be costly. In some cases, experts might need to worry that their failure to render a careful and informed opinion will expose them to a lawsuit for negligence.

Maritime Experts Sued for Negligence

A dispute that illustrates the potential risks experts take when they provide opinions involves a cargo ship that was heavily damaged by fire. The owners contended that the ship was a total loss, meaning that the cost of repairs exceeded the ship’s value. The insurers disagreed. The insurance companies offered the ship’s estimated repair costs — an amount that they contended was less than the ship’s value — to settle the claim.

The owners eventually scrapped the ship and offered to settle for about $1.1 million. When the insurance companies declined that offer, the owners sued. The insurers hired a marine consultancy firm to provide an expert opinion concerning the vessel’s repair costs. The firm based its opinion on information provided by the ship’s builder and by two Chinese shipyards.

The primary dispute involved the amount of steel that would be required to repair the accommodation block (the portion of a cargo ship in which crew cabins are located). The marine consultancy firm estimated that the repairs would require 312 metric tons of steel. The owners’ technical expert estimated that 542 metric tons would be needed. The price differential between the two estimates was substantial. The cost of 542 metric tons of steel would have exceeded the ship’s value prior to the fire, while 312 metric tons would have produced a repair cost that was less than the ship’s value.

The experts eventually met and, as a result of the meeting, the marine consultancy firm revisited its opinion. It decided that it relied on faulty information and that the actual cost of repair would be almost $4 million more than the ship’s insured value. The insurance companies then settled the owners’ claim for $1.3 million, plus legal fees.

The insurers brought a claim for negligence against the consulting firm, arguing that they could have settled for a lesser amount if they had been properly advised. They also would have been responsible for lower legal fees. The insurers’ claim against the consulting firm was settled after mediation.

American Law Concerning Expert Liability

The case involving the cargo ship arose under British law, which in 2011 abandoned the immunity that experts who are hired for litigation previously enjoyed. Would the result be different in the United States? The answer depends upon the law of the state in which the expert has been hired.

The traditional rule in the United States has given witnesses — including experts — immunity for their courtroom testimony, even if the testimony is mistaken. Whether experts who are hired in anticipation of litigation should receive immunity for erroneous opinions that are rendered outside the courtroom is less clear.

What is clear is that the law is changing, at least in some states. In half a dozen jurisdictions — California, Connecticut, Louisiana, Massachusetts, Missouri and Pennsylvania — litigants are permitted to sue the experts that they hire for malpractice or breach of contract. At least two states (New Jersey and Vermont) allow court-appointed experts to be sued for negligence. Other states, including Michigan, continue to give experts immunity from suit for their testimony, but permit the party that hired the expert to sue for damages that result from reliance on the expert’s mistaken opinion.

The standard of absolute immunity for expert testimony is eroding as courts increasingly ask whether the truth-finding function of a trial is assisted by granting immunity to experts who form their opinions carelessly. How many American states will eventually follow the lead of the United Kingdom by abolishing immunity for expert witness testimony is uncertain. It is certain, however, that experts should exercise care and adhere to professional standards when they form their opinions. The failure to do so will hurt their reputations and might subject them to disciplinary sanctions imposed by professional organizations or licensing boards. If they are hired in a state that permits malpractice actions against expert witnesses, rendering careless opinions might also hurt an expert’s pocketbook.