Category Archives: Expert Opinions

Bamboo stick massage

Medical Expert Opinion Ruled Admissible Despite Failure to Examine Patient

Dawn Dawsey sued Carnival and the company that provided spa services for a cruise she took, alleging that her hip was fractured when excessive force was used during a bamboo massage. Each party brought Daubert motions to exclude the expert testimony offered by the opposing party. The judge sensibly decided to admit all the expert testimony and let the jury sort it out.

Treating Physicians’ Testimony

The defendants asked the court to exclude the expert testimony of Dawsey’s treating physicians on the ground that they did not prepare expert reports. The court denied the motion as to all experts who were not providing testimony as to the cause of the fracture, because treating physicians are not generally required to provide reports concerning their diagnosis and treatment.

Plaintiff’s Expert’s Causation Testimony

Dr. Christopher Troiano, an orthopedic surgeon, reviewed Dawsey’s post-cruise medical records and concluded that the massage caused her hip injury. The defendants challenged his methodology, claiming that he had none.

In particular, the defendants complained that Dr. Troiano did not examine Dawsey, did not interview her or read her deposition testimony, relied on “anecdotal” statements that she made to treating physicians who recorded them in her medical records, reviewed only the medical records provided by her attorney, and did not consider other possible causes of the injury.

In effect, Dr. Troiano concluded that, given the absence of evidence of any other traumatic event, the massage must have caused the hip fracture. That opinion is supported by logic, as an expert should not be required to speculate about alternative causes of an injury in the absence of evidence that anything else happened to Dawsey that could have fractured her hip.

The court recognized that Dr. Troiano’s methodology was not ideal and appeared to be on the fence as to whether the doctor’s opinion was admissible. As the judge noted: “Reviewing only medical records selected by the plaintiff’s attorney is problematic, to say the least, especially when the expert does not also review the plaintiff’s medical records from before the cruise or review her deposition testimony.”

The court nevertheless took note of cases holding that a medical expert does not necessarily need to examine a patient before forming an opinion about the cause of an injury. The court concluded that it is the jury’s function to weigh evidence. After cross-examination at trial, a jury might give the expert’s opinion no weight at all. That call, however, is one that should be made by a jury, not a judge.

The court noted, however, that “Dr. Troiano’s opinion testimony on causation is far from strong and barely squeaked by the pre-trial motion to exclude it.” The court decided only that the opinion was admissible. Whether the opinion would be sufficient to support a verdict in Dawson’s favor was an issue the court could not decide until all evidence was presented at the trial.

Defense Experts’ Causation Testimony

The defense experts opined that a bamboo massage cannot result in a broken hip. Dawsey moved to exclude that testimony because none of the experts offered an opinion as to the actual cause of the hip fracture.

The court concluded that the experts were not required to explain how Dawsey’s hip was fractured. They were permitted to criticize the causation testimony of Dawsey’s expert and to opine about inconsistencies in Dawsey’s testimony that made the massage an implausible cause her injury.

Defense Radiologist’s Testimony

Dawsey also challenged the admissibility of Dr. Whiteman’s expert testimony. Dr. Whiteman is a diagnostic radiologist. Dawsey argued that Dr. Whiteman is unqualified because he is not a surgeon and does not treat hip fractures. The court concluded that the radiologist could offer an opinion about causation while noting that Dawsey was free to cross-examine him vigorously about any limitations in his medical training that could affect his credibility.

Dr. Whiteman’s report stated: “I do not know the cause of Ms. Dawsey’s left hip fracture, but it definitely was not caused by the massage.” Dawsey argued that Dr. Whiteman rendered that opinion without considering the amount of force that was exerted as the masseuse “placed a hand under the bamboo stick and against the hip and extended the stick outward to stretch the outer side muscles and hip joints.”

Repeating its ruling that defense experts do not need to pinpoint an alternative cause of an injury, the court noted that the defense has no burden to disprove causation. Rather, a defense expert’s testimony is admissible if it casts doubt on the plaintiff’s theory about the cause of an injury. Since Dr. Whiteman did so, it was up to the jury to determine whether his testimony would undermine Dawson’s theory of causation.

Motel

Conviction Reversed Because Police Officer Gave Inadmissible Expert Opinion in Prostitution Trial

The Mount Laurel, New Jersey Police Department arrested John Salyerds as the result of a sting operation. The police ran an internet ad that allegedly offered prostitution services. Salyerds was arrested in a motel room after he responded to the ad.

The police contended that the ad offered a “$50 short stay special.” Prior to the trial, Salyerds asked the prosecution to produce the ad to which he responded. Salyerds contended on appeal that the prosecution gave evasive responses to his request and never produced it.

The prosecutor made the unlikely claim that the police officers who posted the ad to the internet “did not have access to a printer” and therefore did not print a hard copy. The prosecutor also asserted that the police tried to find the ad before the trial so they could print it, but it had mysteriously vanished from the internet. The trial judge barred any reference to the content of the ad since the ad was not produced in discovery.

Salyerds called the number in the ad and asked for the “$50 special.” He was given a motel room number. Salyerds went to that room and asked for the “short stay special.” An undercover detective told him to put the money on the table. As Salyerds was doing so, the detective went into the bathroom. Armed officers then burst into the room and arrested Salyerds for engaging in prostitution as a patron (purchaser of services).

There was no prostitute in the room. The undercover detective did not intend to provide sex. No touching occurred. The judge nevertheless found Salyerds guilty because he provided money in exchange for sex. Whether the prosecution proved Salyerds’ intent was the key issue at trial.

Officer’s Testimony

During Salyerds’ municipal court trial, the prosecutor asked one of the detectives who was involved in the arrest to explain the meaning of “short stay special.” Salyerds objected that the question called for expert testimony and that the detective had not been designated as an expert.

The municipal judge overruled the objection and said that the detective could explain what the term meant to him. The real question, however, was what “short stay special” meant to Salyerds, not what it meant to a police detective.

The detective testified that a “short stay special” is “an agreement between two people to engage in an act of prostitution under circumstances where they agree to the act and the amount itself.” The detective agreed that “short stay special” is not a common term and testified that his understanding of the term was based on his training and experience as a police officer.

The municipal judge found Salyerds guilty on the strength of that testimony. On appeal from a New Jersey municipal judge’s decision, a defendant is entitled to a new trial before a Law Division Judge. The detective gave the same testimony before the Law Division Judge, who overruled an objection that the testimony constituted an expert opinion.

The Law Division Judge decided that the detective was giving an admissible lay opinion and found Salyerds guilty. Salyerds took another appeal, this time to the New Jersey Superior Court Appellate Division. That court reversed his conviction.

Appellate Ruling

Pretrial discovery obligations in a New Jersey criminal prosecution require identification of expert witnesses and production of either a copy of an expert report or a summary of the expert’s testimony. The prosecution did not comply with that rule. The question on appeal was whether the detective’s opinion was a permissible lay opinion or inadmissible expert testimony.

The term “short stay special” is not self-defining. The term may have different meanings, depending on context. A resort might use “short stay special” to refer to a discounted room price for a weekend getaway. Prostitutes might use the term to mean something very different.

While municipal judges typically allow police officers to give any testimony the prosecution wants to elicit, the Appellate Division paid close attention to the law governing expert evidence. The prosecution offered the detective’s opinion precisely because the detective had more knowledge than the judge about what “short stay special” might mean when that term is used by prostitutes.

Lay opinions might help a judge understand evidence, but New Jersey law confines lay opinions to knowledge acquired through a witness’ perceptions. A witness who simply interprets what the witness saw or heard, without relying on other information, is giving a lay opinion. “It looked to me like he was aiming the gun” is an example of a lay opinion.

Expert opinions, on the other hand, depend on specialized knowledge that is beyond the ken of an ordinary person. The detective testified that his understanding of the term “short stay special” was informed by his training and experience as a police officer. Since the detective relied on specialized knowledge to help the court understand a term of art allegedly used by prostitutes, the detective was testifying as an expert.

Slang Experts

Police officers often testify about their understand of drug jargon in drug prosecutions to explain how a defendant might have understood common words like “rock” (crack cocaine) or “bump” (one gram). They identify numbers jotted on a piece of paper as a “drug ledger.” All of those opinions are based on a claim of specialized knowledge and can only be provided if the prosecution complies with rules governing the admissibility of expert testimony.

The Appellate Division concluded that the trial judge failed to apply the proper legal standard when it ruled that the detective could give a lay opinion about the meaning of a slang term. Since the detective was testifying as an expert, the prosecution’s failure to identify him as an expert witness barred his testimony.

Finally, the court noted that Salyerds engaged in no sexual behavior and did not discuss sex with the undercover officer, except to refer to a “short stay special.” The only evidence of Salyerds’ criminal intent was therefore his use of that phrase. Since Salyerds’ conviction hinged on the detective’s inadmissible opinion that the phrase referred to an act of prostitution, Salyerds’ conviction had to be reversed.

Florida Supreme Court

Florida Supreme Court Adopts Daubert After Rejecting It

What a difference a judge makes. Or, in the case of the Florida Supreme Court, three newly appointed justices.

On October 15, 2018, the Florida Supreme Court rejected the state legislature’s adoption of the Daubert standard for expert witness testimony. The majority opinion concluded that the standard infringes the jury’s role to determine whether expert testimony is reliable.

Just seven months later, the court ruled that the “grave constitutional concerns” about Daubert’s now “appear unfounded.” What changed in the seven months since the court rejected Daubert? Did the weight of precedent compiled over a mere seven months persuade the court that it had made an incorrect decision? It usually takes years, and often decades of accumulated rulings, before a court disturbs its own precedent.

The only thing that changed is the composition of the court. The 2018 decision was authored by Justice Peggy Quince. Her opinion was joined by Justices Barbara Pariente, R. Fred Lewis, and Jorge Labarga.

Since then, Justices Quince, Pariente, and Lewis have all reached Florida’s mandatory retirement age. They have all been replaced by Gov. Ron DeSantis, creating what the Sun-Sentinel describes as “the most conservative Florida Supreme Court in decades.”

Ironically, Gov. DeSantis championed his appointments as masters of “judicial restraint” who oppose “judicial activism.” Overruling a recent precedent simply because a court wants to move Florida law in a more conservative direction is the very definition of judicial activism.

The Court’s Opinion

The court decided in 2017 that it would not adopt Daubert as part of Florida’s evidence code, notwithstanding the legislature’s desire to do so. The 2018 decision reversed a trial court ruling that applied Daubert.

The court’s newest decision claims not to “readdress” the correctness of its 2018 decision. Rather, the court’s decision reconsidered its 2017 decision not to adopt the Daubert standard.

The court decided to “revisit the outcome of the recommendation on the Daubert amendments.” The court decided that “the ‘grave constitutional concerns’ raised by those who oppose the amendments to the Code appear unfounded.”

To support that conclusion, the court quoted extensively from a dissenting opinion in the 2017 decision. As Justice Labarga noted in dissenting from the new opinion, the court acted “without further input from the Committee or the public.” The court held no new hearings and considered no new evidence. The only intervening change suggesting that the “grave constitutional concerns” identified in 2017 had suddenly become “unfounded” was the addition of three new justices who agreed with the 2017 dissent and saw an opportunity to impose their will on Florida law.

Ramifications of Adopting the Daubert Standard

Whether the Florida court’s judicial activism is wise depends on the reader’s perspective. Florida’s Frye standard has its faults, chief among them its failure to recognize that expert opinions might be well founded even if they are based on new or novel techniques that are not yet generally accepted by the scientific community. Those faults persuaded the U.S. Supreme Court to reject the Frye standard in Daubert.

The Daubert standard also has its faults, including its tendency to force judges who are unschooled in science to evaluate the reliability of scientific methodologies. There is little evidence that judges are more capable of evaluating expert testimony than jurors who might collectively have a stronger background in science than the judge. The decision has been justly criticized for diminishing the importance of juries in civil trials by substituting a judge’s opinion of expert evidence for the community’s opinion as represented by jurors whose duty is to evaluate evidence.

Business lobbyists and the insurance defense industry are the strongest proponents of Daubert because they view it as a shield against “junk science.” They tend to view any science offered by plaintiffs in toxic tort and products liability cases as “junk” if it might cause corporate defendants to lose trials.

Another view of Daubert, however, sees the decision as liberalizing the standard for admitting expert evidence by permitting expert testimony to be heard even if it is based on new or novel methods, provided those methods are reliable. Whichever interpretation of Daubert a court might adopt, it is clear that Daubert has increased the cost of litigation by encouraging Daubert motions that are advanced for strategic reasons, regardless of their merit.

The disparity in those competing views of Daubert explains why different courts have sharply divergent ideas about how Daubert should be applied. Empirical studies suggest that judges are excluding significantly more expert evidence after Daubert than before Daubert, despite the Supreme Court’s stated intent to liberalize the standard for admitting expert opinions.

To the extent that junk science was ever a serious problem in civil cases, studies suggest that judges in civil cases have become less likely to admit expert evidence that is scientifically groundless, whether or not they apply the Daubert standard. In criminal cases, however, junk forensic science remains a problem of crisis proportions. If the adoption of Daubert encourages Florida judges to be skeptical of prosecutors who use unreliable evidence in an effort to prove guilt beyond a reasonable doubt, the Florida Supreme Court’s abrupt “about face” might improve the quality of justice.

DOJ Seeks to Limit Expert Testimony in CVS-Aetna Merger Case

CVS and the U.S. Department of Justice are seeking to block or limit the testimony of the American Medical Association’s proposed witnesses in the CVS-Aetna merger review.

The DOJ’s New Scrutiny of Vertical Mergers

In December, CVS Health, the nation’s largest pharmacy chain, agreed to purchase Aetna, the third largest health insurance company for $69 billion. This deal represents a vertical merger, where two companies who work in similar industries want to combine.

Until recently, vertical mergers did not raise concern for regulators. However, the Department of Justice’s Antitrust Division recently filed a lawsuit against AT&T after it agreed to acquire Time Warner. The AT&T-Time Warner deal went through, but it caused uncertainty about what factors the Federal Trade Commission and the DOJ will use to evaluate similar cases.

CVS and Aetna Merger

The CVS and Aetna merger agreement came about ten months after Aetna terminated its agreement to buy its competitor, Humana, for $37 billion. A federal judge had ruled that Aetna’s purchase of Humana would violate antitrust laws.

Here, the Department of Justice challenged the CVS and Aetna deal on the grounds that the merger would harm competition in the Medicare Part D market in some locations in the United States. To settle the DOJ’s antitrust concerns, CVS and Aetna sold Aetna’s Medicare Part D business to WellCare Health Plans. Following the sale, the deal was closed in November.

Tunney Hearing

Under the Tunney Act, courts have the power to review DOJ decisions. Here, federal District Court Judge Richard Leon ordered a Tunney hearing to review the parties’ consent decree. Essentially, Judge Leon is tasked with reviewing the CVS-Aetna merger. Judge Leon’s role is to examine the settlement agreement between the DOJ, CVS, and Aetna and determine whether it is in the public’s best interest.

Judge Leon has previously voiced his skepticism of the deal that CVS and Aetna struck with the DOJ. He said that the settlement only addresses “about one-tenth of 1%” of the issues with the merger.

Proposed Expert Witnesses

Judge Leon released a list of witnesses that consisted of representatives of groups that had filed amici curiae briefs against the deal, including the American Medical Association and the American Antitrust Institute.

CVS and the DOJ objected to the American Medical Association’s proposed economics and health experts, Richard Scheffler and Neeraj Sood, and antitrust legal expert, Tim Greaney. The government also objected to other witnesses proposed by the AIDS Healthcare Foundation, Consumer Action, and U.S. PIRG.

Attorneys for CVS and the Department of Justice filed motions arguing against allowing the amici curiae witnesses to testify because the testimony is likely to be outside of the bounds of the limited review of the Tunney hearing.

CVS argued that the amici curiae “have made clear they intend to use these Tunney Act proceedings as a platform to present theories of purported harm to competition that the government has not alleged — theories the government in fact rejected after a lengthy and thorough review.”

Michigan

Michigan Court of Appeals Rules Experts Not Absolutely Immune

A Michigan Court of Appeals panel has ruled that licensed professionals who serve as expert witnesses owe the same duty to their party as they would to any client and that witness immunity is not a defense against professional malpractice.

Foreclosure Case

Diana and Spiro Voutsaras defaulted on a commercial mortgage that was held by Gallagher Investments. They hired Murphy & Spagnuolo PC to represent them in foreclosure proceedings. The law firm advised the Voutrsarases to file a counterclaim against Gallagher and a third-party claim against some of Gallagher’s principal actors for malpractice.

The firm hired Kenneth Mogill as a legal ethics expert and Slucter and Gannon Group as experts in real estate brokerage. The law firm then informed the Voutsarases that their litigation strategy was bound to fail. The district court granted summary judgment against the Voutsarases.

Malpractice Case

Following Diana Voutsaras’ death in January 2015, her estate filed a suit against Murphy & Spagnuolo and the retained experts. The estate claimed that the law firm had failed to advise it of a favorable settlement offer and that it had deliberately concealed the fact that the estate’s claims were frivolous in order to increase pretrial costs. The estate also claimed that the expert witnesses had breached their duties to the estate by failing to properly investigate the facts required to formulate their opinions, failing to understand the applicable standards, and failing to provide a competent professional opinion.

The law firm settled with the estate and the expert witnesses filed a motion for summary judgment arguing that they were protected by witness immunity. The district court granted summary judgment to the expert witnesses, using a broad interpretation of the witness immunity standards. The estate appealed.

Court of Appeals

On appeal, the estate argued that the expert witnesses owed to it a legal duty and that they breached that duty. The expert witnesses claimed that the trial court was correct in its determination that all witnesses enjoy total immunity for any relevant testimony provided during judicial proceedings. The trial court and the expert witnesses relied on the 1999 Michigan Supreme Court case, Maiden v. Rozwood.

The Michigan Court of Appeals panel ruled that Maiden was only partially applicable to this case. The court agreed that the witness immunity doctrine protects any witness based on the substance of their testimony or evidence. However, the panel ruled that witness immunity did not necessarily protect a witness from giving professionally incompetent testimony.

It wrote,

To the extent plaintiff’s claims rest on the Mogill defendants having provided damaging testimony or evidence intended for consideration by the trial court, the Mogill defendants are clearly protected by the doctrine of witness immunity. However, we find nothing in Maiden, or any other Michigan case law, suggesting that any other claim of professional malpractice by a client is precluded merely because the professional was expected to provide expert testimony.

The panel concluded, “We hold only that the Mogill defendants are not absolutely immunized from professional malpractice claims where they already owed a duty of professional care, merely because part of their retention included the provision of expert testimony.”

Book Questions Science of Criminal Investigation

A new book questions the science behind criminal investigations by examining a 27-year-old arson and murder case.

Jo Ann Parks’ Conviction

On April 9, 1989, the garage apartment of Jo Ann Parks went up in flames. Parks escaped, but her three young children were still inside. She ran next door to her neighbor’s house to call the police. Investigators initially believed that the fire was accidental, but eventually concluded that it was arson. Parks was accused of arson and the triple murder of her children.

At Parks’ trial, fire investigators testified that the fire was caused by human origin. One investigator testified that he believed that there had been two fires, one that was started in the living room and one that started in the children’s bedroom. Two points of origin meant that the fire was caused by arson because an accidental fire would only have one point of origin. Investigators also testified that they believed that one of the children had been trapped in a closet that had a door that was blocked by a laundry hamper.

Parks was convicted of first-degree murder and sentenced to life without the possibility of parole.

Humes’ Book

On January 8, 2019, Edward Humes published Burned: A Story of Murder and a Crime That Wasn’t.  In his book, Humes recounts the story of the fire and its repercussions. Humes explains how on the night of the fire, Parks asked a police officer repeatedly if her children were okay and then complied with the request that she wait at a police station a few blocks away. Some of the jurors said that Parks’ acquiescence with that request without demanding to see her children was the deciding factor in their vote to convict her of arson.

Humes examined the way that evidence was collected in Parks’ case. Humes explained that the arson experts who testified at Parks’ trail relied on their mapping of the fire’s path. Humes explained that the arson experts did not fully understand flashover, which happens when a fire gets so hot that “every flammable surface in the room not already burning will ignite in rapid succession.”

To illustrate flashover, Humes explained an experiment that was conducted at the Federal Law Enforcement Training Center in Glynco, Georgia the same year that Parks’ trial took place. The experimenters set two rooms on fire and asked veteran arson investigators to examine each room and choose the quadrant of the room where the fire had started. While the participants thought that this would be an easy task, they chose the wrong quadrant more than 90 percent of the time. Humes explained that this and other similar experiments showed that flashovers made determining the cause of domestic fires very difficult. Despite the fact that flashover had occurred in Parks’ apartment, arson investigators testified that the burn patterns implicated Parks in the arson.

Humes notes that arson investigation is just one of many of the forensic techniques that have been recently discredited. He points to bite marks, hair and fiber comparisons, matching fingerprints, and lineups as examples of forensic investigation techniques that have been routinely discredited by later comparisons of DNA samples.

Dna Forensic

Forensic DNA Scientist Links Evidence to Accused Murderer

A forensic DNA scientist has linked several pieces of evidence to an accused murderer who is standing trial for the beating, stabbing, and strangling of a Temple University student.

The Murder

On September 2, 2017, George Stabilito had breakfast with his wife and then went to her property eight miles away to check on her yard. He looked inside the lakeside shed, into which snakes occasionally made their way. Instead of finding snakes, Stabilito found a large blue storage bin with a body inside.

The body of Jenna Burleigh, a 22-year-old Temple University Student, was stuffed inside the plastic storage bin. Her body was naked, her midsection was covered with a blanket, and her right leg was bent and contorted. Burleigh had sustained more than 143 injuries, including two stab wounds and more than 39 head injuries.

The Investigation

When authorities watched surveillance videotapes from a few nights before Burleigh’s body was found, they saw Joshua Hupperterz and Jenna Burleigh sitting and talking together at a bar and then leaving the bar together at around 2:00 a.m. The two were then seen walking toward Hupperterz’s apartment building.

According to prosecutors, Joshua Hupperterz met Burleigh at a bar on August 31, 2017, and they went back to his apartment to have consensual sex. They contend that the sex turned violent and Hupperterz beat Burleigh, stabbed her, smashed a cereal bowl over her head, and strangled her on the kitchen floor.

Hupperterz has since admitted to transporting Burleigh’s body to his mother’s garage and then to his grandmother’s property, but denies killing her. Instead, Hupperterz claims that his roommate, Jack Miley, intervened in the fight and strangled Burleigh. Miley has denied any role in the crime.

Huppertz was charged with murder, abuse of a corpse, and separate drug-related charges. Assistant District Attorney Jason Grenell said that the District Attorney’s Office offered Hupperterz a plea deal, but he rejected the deal. The plea deal was for Hupperterz to plead guilty to third-degree murder and be sentenced to 30 to 60 years in state prison. Since Hupperterz chose to go to trial, he faces a mandatory sentence of life in prison if he is convicted of first or second-degree murder.

The Trial

At trial, the state trooper who was present at the autopsy testified that the medical examiner took nail clippings from each of Burleigh’s hands. The Philadelphia forensic scientist and DNA expert took the stand and testified that the genetic profile from the nail clippings matched the DNA of Hupperterz, and not his roommate.

The forensic DNA scientist from the Philadelphia crime lab also testified about evidence that was found at the scene of the crime. The expert matched Hupperterz’s genetic profile to a knife that was found next to the sink. The scientist told the jurors about a boot that was found in the closet of Hupperterz’s roommate, Jack Miley. Prosecutors say that Burleigh was wearing that boot on the night that she died.

The scientist testified that the genetic profile of the material found on the buckle and side of the boot was consistent with Hupperterz. He testified that the DNA was one in 12.64 duodecillion (which includes 39 zeroes) times more consistent with Huppertz than anyone else in the Caucasian population.

Power Plant

Expert Contradicted by Own Email

An expert witness has been contradicted by his own email in a hearing before Rhode Island’s Energy Facilities Siting Board.

Proposed Plant

Invenergy Thermal Development LLC has proposed to build a $1 billion fracked gas and diesel oil-burning power plant in northwest Rhode Island. The proposal is currently before Rhode Island’s Energy Facilities Siting Board (EFSB).

The proposed plant will be a nearly 1,000-megawatt natural gas and diesel facility in Burrillville, Rhode Island. Opponents of the project argue that the plant is unnecessary.

Expert Testimony

Invenergy retained Ryan Hardy to testify at the hearings before the Energy Facilities Siting Board. Hardy opined that the power-purchase agreement or capacity supply obligation (CSO) that was awarded to Invenergy was proof that the plant was needed to keep the lights on and the electric grid running smoothly in Rhode Island.

Jerry Elmer from the Conservation Law Foundation and Michael McElory, attorney for the town of Burrillville, argued that the termination of the CSO by the operator of the regional power grid meant that the proposed power plant was unnecessary.

Hardy argued that the loss of the CSO and the subsequent confirmation by the Federal Energy Regulatory Commission was the result of Invenergy failing to meet construction and approval benchmarks. It did not have anything to do with “whether or not the plant is needed.” Hardy said, “I don’t agree that it condemns the (power plant). In the state of Rhode Island, a facility needs an EFSB permit to be built. It does not need a CSO.”

The Independent System Operator filed its request to terminate the CSO when Invenergy pushed back the targeted date of operation from 2019 to 2021 or later.

Email Contradiction

However, an email that Hardy sent to two Invenergy senior managers, John Niland, and Ken Parkhill, on October 4, 2017, seems to contradict his testimony.

In his email, Hardy wrote, “Based on our experience before the Rhode Island EFSB and NTE Killingly’s (power plant) experience before the (Connecticut) Siting Council, it appears that the applicable state permitting boards are unlikely to approve the construction of new natural gas plants without having secured a CSO through an FCA (ISO New England auction).”

When Elmer questioned Hardy about his email, Hardy explained that the email was only about potential issues and questions that Niland may encounter during an upcoming meeting. He said, “This is not my opinion. These are talking points that were for Mr. Niland to have a discussion with the ISO New England.”

Elmer said that Hardy’s response shows that he was being dishonest with Invenergy or asking Invenergy to be dishonest with ISO New England. Elmer said, “This casts Invenergy in a very, very unfavorable light…. [T]he fact that they would lie to the ISO is very revealing and damaging to Invenergy. ISO depends on getting accurate information from power-plant operators all over New England. They use that information to keep the grid running. If a plant operator gives false, dishonest information to the ISO, the ISO is unable to do its job.”

FTC

FTC Experts Fail to Persuade Judge that DIRECTV Advertising Was Deceptive

The Federal Trade Commission (FTC) relied on the testimony of two expert witnesses in bringing an unsuccessful claim of deceptive advertising against DIRECTV. The judge’s analysis of the expert testimony sheds light on how experts may need to design consumer surveys to satisfy federal judges.

The FTC’s Claims Against DIRECTV

The FTC sued DIRECTV to enforce two federal laws that protect consumers from unfair or deceptive advertising and marketing practices. The FTC did not contend that DIRECTV made false statements in its advertising, but federal law regards advertising as deceptive when an advertiser “hides” information that would be important to a consumer’s purchasing decision by failing to disclose it before the purchase is made. In addition, federal law requires online vendors to obtain a consumer’s informed consent before making recurring charges to the consumer’s credit card.

In the FTC’s opinion, DIRECTV violated those laws by advertising its satellite television services without disclosing that:

  • the introductory price only lasts 12 months;
  • the subscriber must agree to receive services for 24 months;
  • a subscriber who cancels before the end of the 24 months is charged a fee of $20 per month for the remaining months of the agreement; and
  • a subscriber who requests a “free” premium channel (like HBO) for 3 months must cancel the channel before the 3-month period ends to avoid further charges.

DIRECTV advertised its services on television, through internet banner ads that (if clicked) would lead consumers to its website, in circulars that were distributed in Sunday newspapers or mailed directly to consumers, and by a variety of similar advertising tactics. Much of the FTC’s case was based on the contention that when DIRECTV disclosed the terms mentioned above, it buried them in fine print or hid them behind hyperlinks.

To prove that DIRECTV violated the law, the FTC needed to establish that a reasonable consumer’s net impression of DIRECTV’s purchase terms, after reviewing DIRECTV’s advertising, would have been more favorable than the actual terms. For example, if a consumer’s net impression would be that the introductory offer could be cancelled at no charge after 12 months when, in fact, DIRECTV would charge a cancellation fee, the advertising would be misleading.

To prove that DIRECTV’s advertising would cause reasonable consumers to have an inaccurate net impression of DIRECTV’s purchase terms, the FTC relied on expert testimony. Dr. Tülin Erdem conducted an online survey that asked respondents to view a print advertisement that DIRECTV distributed in 2013. She testified that the advertisement was representative of other DIRECTV ads.

Court’s Analysis of the DIRECTV Print Ads

Before reaching the survey results, the court noted its own impression of the ad. The judge (who presumably reads ads with greater care than average consumers, particularly when the ads are introduced as trial exhibits) thought the ad sufficiently disclosed that the promotional price for a 24-month contract would only last 12 months and that a $20 per month cancellation fee would be charged if a customer cancelled the contract before it ended.

Those disclosures appear at the bottom of the ad in print that is considerably smaller than the promotional price, which is prominently advertised as lasting for 12 months. The judge nevertheless thought that consumers would read the entire ad because deciding upon a particular DIRECTV package requires consumers to consider a wealth of information. The judge cited no evidence to support his view that consumers read fine print before making complicated decisions.

The judge accepted that it was not possible for DIRECTV to disclose the price increase that consumers would face after the 12-month promotional price ended because DIRECTV had not yet decided what fee it would charge in the following year. The judge accordingly concluded that failing to disclose the price increase in advance was not deceptive. By that logic, DIRECTV could impose an outrageous price hike and consumers, having no reason to suspect that prices could increase so dramatically, would nevertheless be stuck paying a $20 per month cancellation fee for services they were no longer receiving.

Expert Testimony – Dr. Erdem

Since experts survey ordinary consumers, not federal judges who closely scrutinize exhibits offered in lawsuits, the court was required to consider Dr. Erdem’s opinion about how a consumer who received a DIRECTV ad in the mail would have understood it. Dr. Erdem presented survey participants with the original ad and with an ad that she modified to disclose the contract terms more conspicuously. She found that the modified ad increased consumer understanding of the terms.

The court concluded that the survey did not reveal whether the original ad was likely to mislead reasonable consumers based on the net impression that the ad created. The court agreed with DIRECTV that changing the ad did not test whether the original ad was misleading. The survey did not test the overall impression of consumers, which was the relevant question. The fact that the ad could have been better didn’t mean that the existing ad violated the law.

The court faulted Dr. Erdem for not doing a deception study that would have tested the overall impression that consumers draw from the ad. The court also faulted Dr. Erdem for lumping together participants who said they “did not know” the contract terms and those who “did not remember” the terms.

Because Dr. Erdem asked no follow-up questions, she could not determine whether a participant’s failure to recall the contract terms was related to the way information was presented in the ads. Nor could she determine whether participants who did not recall the terms had formed an incorrect impression of the terms after reading the ad.

Finally, the court was skeptical of the value of a web-based survey that focused on a print ad. A consumer reading the ad could view it as a whole and read the fine print by looking at the bottom of the page. A survey participant needed to scroll to reach the disclosures.

While it seems reasonable to believe that survey participants who are asked to look at an ad on a computer screen would scroll through the ad, the court thought that survey participants might not realize that it was important to read the entire ad and therefore might not do so. Of course, people who receive newspaper flyers might not realize it is important to read the fine print at the bottom of the ad, which was the point Dr. Erdem tried to make when she testified that “a majority of consumers don’t read the fine print.” The court was unimpressed by that testimony.

Expert Testimony – Dr. Patkanis

Dr. Anthony Pratkanis also testified for the FTC as an expert witness. He discussed general principles of “social influence,” including the principle that making a “lowball” offer — an initially discounted price or a free gift — will induce consumers to purchase goods or services, even if the price will later increase.

Dr. Patkanis pointed to two representative print ads that employed a lowball strategy by calling attention to the promotional price by using a large font and a brightly colored background while relegating the less favorable terms to a small black font against a white background at the bottom of the page.

Favoring his own impressions over those of Dr. Patkanis, the court concluded that the ads were not deceptive. The court gave “minimal weight” to Dr. Patkanis’ testimony because he conducted no surveys to determine whether the ads were likely to confuse consumers and because some of his testimony (such as his opinion that consumers would regard a “slashed out” price as the regular price) were not supported by empirical research.

Web-Based Ads

Given the court’s reliance on its own understanding of the advertisements and its disagreement with the analysis offered by the expert witnesses, the court ruled against the FTC and concluded that the DIRECTV print ads were unlikely to deceive ordinary consumers. The court reserved judgment, however, with regard to DIRECTV’s website.

Dr. Erdem’s consumer survey regarding the website supported her conclusion that the website created a net impression that deceived consumers. The court noted that the website conspicuously disclosed that the 12-month discounted price was offered as part of a 24-month contract, but other significant details (including the early cancellation fee) were only revealed by hovering over an “offer details” link.

Consumers had to click through other pages to make a purchase, but full details continued to be hidden behind links. While those links were labeled “additional offer details,” nothing called attention to the importance of those details. Even the shopping cart page hid critical information behind a “terms and conditions” link.

Victory for DIRECTV

The court had not yet heard DIRECTV’s evidence when it evaluated the testimony of the FTC experts. Although it was willing to dismiss the FTC’s claims regarding the print ads, it deferred its ruling regarding the website until hearing all the evidence, including the testimony of DIRECTV’s experts. At the same time, the court observed that the FTC’s evidence that various iterations of the website were misleading was “far from overwhelming.”

Probably seeing that the handwriting was on the wall, the FTC decided to dismiss the case. Since it was seeking a judgment of $4 billion, the dismissal represented a significant victory for DIRECTV, and may have provided an object lesson in how experts should design surveys that might satisfy federal judges.

Legal Services

Michigan Court of Appeals Rules Experts Not Absolutely Immune

A Michigan Court of Appeals panel has ruled that licensed professionals who serve as expert witnesses owe the same duty to the party that hires them as they would to any client and that witness immunity is not a defense against professional malpractice.

Foreclosure Case

Diana and Spiro Voutsaras defaulted on a commercial mortgage that was held by Gallagher Investments. They hired Murphy & Spagnuolo PC to represent them in foreclosure proceedings. The law firm advised the Voutrsarases to file a counterclaim against Gallagher and a third-party claim against some of Gallagher’s principal actors for malpractice. The firm hired Kenneth Mogill as a legal ethics expert and Slucter and Gannon Group as experts in real estate brokerage. The law firm then informed the Voutsarases that their litigation strategy was bound to fail. The district court granted summary judgment against the Voutsarases.

Malpractice Case

Following Diana Voutsaras’ death in January 2015, her estate filed a suit against Murphy & Spagnuolo and the retained experts. The estate claimed that the law firm had failed to advise it of a favorable settlement offer and that it had deliberately concealed the fact that the estate’s claims were frivolous in order to increase pretrial costs. The estate also claimed that the expert witnesses had breached their duties to the estate by failing to properly investigate the facts required to formulate their opinions, failing to understand the applicable standards, and failing to provide a competent professional opinion.

The law firm settled with the estate and the expert witnesses filed a motion for summary judgment arguing that they were protected by witness immunity. The district court granted summary judgment to the expert witnesses, using a broad interpretation of the witness immunity standards. The estate appealed.

Court of Appeals

On appeal, the estate argued that the expert witnesses owed to it a legal duty and that they breached that duty. The expert witnesses claimed that the trial court was correct in its determination that all witnesses enjoy total immunity for any relevant testimony provided during judicial proceedings. The trial court and the expert witnesses relied on the 1999 Michigan Supreme Court case, Maiden v. Rozwood.

The Michigan Court of Appeals panel ruled that Maiden was only partially applicable to this case.  The court agreed that the witness immunity doctrine protects any witness based on the substance of their testimony or evidence. However, the panel ruled that witness immunity did not necessarily protect a witness from giving professionally incompetent testimony.

It wrote, “To the extent plaintiff’s claims rest on the Mogill defendants having provided damaging testimony or evidence intended for consideration by the trial court, the Mogill defendants are clearly protected by the doctrine of witness immunity. However, we find nothing in Maiden, or any other Michigan case law, suggesting that any other claim of professional malpractice by a client is precluded merely because the professional was expected to provide expert testimony.”

The panel concluded, “We hold only that the Mogill defendants are not absolutely immunized from professional malpractice claims where they already owed a duty of professional care, merely because part of their retention included the provision of expert testimony.”