Category Archives: ExpertWitness

stock market

Exxon Expert Challenges Authorities’ Claims as “Circular”

An expert for Exxon Mobil Corporation has opined that the authorities’ claims that the company hid the financial risks of climate change are “a tad circular.”

The Securities-Fraud Trial

New York Attorney General Letitia James filed a complaint against Exxon Mobil Corporation, alleging that Exxon intentionally misled investors about the way it planned for the expected future impact of climate change on its business. According to the complaint, investors lost between $476 million and $1.6 billion when the alleged scheme was exposed.

New York also claims that former Exxon Chief Executive Officer Rex Tillerson spearheaded a plan to dupe investors into thinking it was applying a high “proxy cost” for carbon to its investment decisions, while secretly using a lower figure to evaluate projects including those in the Alberta oil sands.

Irving, Texas-based Exxon responded there weren’t any losses from the alleged scheme because there was no deception.  Tillerson testified the allegations regarding a plan to dupe investors were false.

Expert Witness Testimony

The state retained Eli Bartov, an accounting professor at New York University, and Peter Boukouzis, an assistant professor of business management at the University of Saint Katherine in San Marcos, California, to testify on its behalf.

Bartov testified that Exxon had inflated its stock by lying to concerned investors starting in 2014. Boukouzis testified about the resulting stock drops tied to the news events.

Exxon Mobil Corporation hired Allen Ferrell, a Harvard Law School professor who is also a senior consultant at Compass Lexecon, to testify on its behalf.  Ferrell is the last witness to testify in the three-week trial in Manhattan.

Ferrell refuted Bartov’s testimony by saying that Bartov’s study of Exxon’s share-price movements hadn’t controlled for fluctuations in the energy industry.  Ferrell said that Boukouzis wrongfully cited two news-related stock movements that don’t qualify as statistically significant.

The News Events Used in Damage Calculations

Ferrell also argued that New York’s claim that investors lost as much as $1.6 billion after authorities accused the company of hiding the financial risks of climate change was “a tad circular.”

Ferrell said that it was somewhat convenient for an authority to cite news about its own fraud investigation as the cause of a company’s losses.  He stated, “You don’t shoot the arrow and then draw a bulls-eye around it.”

The complaint outlines three news events that allegedly resulted in Exxon’s stock dropping:

  • Two events that relate to climate probes in 2016 by the California attorney general and the U.S. Securities and Exchange Commission.
  • New York’s June 2017 claim that it uncovered evidence of a “sham.”

The state plans to use these three events to calculate the alleged losses.  Exxon’s stock did dip on the days of the three news events. The state’s calculation of losses would become crucial if it wins the trial.

In it memorandum, New York wrote, “The evidence will show that when the deception uncovered by the state’s investigation and related investigations was revealed, Exxon Mobil’s stock price fell, injuring investors who must now be made whole.“

The case is being heard by New York Justice Barry Ostrager, who will decide the case without a jury.

Forensic Expert Should Have Been Allowed to Testify About Deleted Emails

A recent decision of the Court of Appeals for the Third Circuit addressed the importance of using forensic experts when a litigant is suspected of destroying electronic evidence. The practice of deleting emails will often entitle the opposing party to a remedy.

In most cases, the remedy will be an instruction that allows the jury to infer that a party deleted emails because their content would have helped the opposing party prove its case. The strength of that inference, however, may depend on testimony provided by an expert witness.

Nature of the Lawsuit

GN Netcom, Inc. manufactures telephone headsets that are primarily used for hands-free conversations in the customer service industry. GN dominates the headset market in Europe. GN sued a competitor, Plantronics Inc., which dominates the headset market in North America, for antitrust violations.

GN claimed that Plantronics engaged in unlawful anticompetitive conduct by offering rebates and other benefits to distributors who agreed not to purchase headsets from manufacturers other than Plantronics. The agreement also conditioned the benefits upon an agreement not to market competitors’ headsets on resellers’ websites.

GN sent Plantronics a letter alleging a violation of antitrust law and demanding compensation. Plantronics initiated a “litigation hold” that directed employees to preserve all corporate documents relevant to the claim. Plantronics updated the hold after GN initiated a lawsuit. Plantronics also trained employees to obey the hold.

Deletion of Emails

Notwithstanding the litigation hold, Plantronics’ Senior Vice President of Sales directed employees to delete certain emails, including those that referred to GN or its products. In particular, the VP ended three emails referring to competition with an instruction to delete the email chain and to delete certain emails that he flagged as “inappropriate.” The VP also deleted over 40% of his own emails that were sent during a relevant time period.

The VP told employees to stop putting information about competition in writing. Managers also instructed employees to refer to competitors by code names. GN was code named “zebra.” The CEO also expressed his concern that there might be “damning statements” in staff emails.

When Plantronics’ general counsel learned of the VP’s action, she directed his attention to the litigation hold, tried to obtain backup copies of the emails so that they could be preserved, and engaged a forensic expert to try to recover the deleted emails. Ignoring its lawyer’s efforts, Plantronics declined to pay the forensic effort to complete his work and destroyed the backup tapes of the deleted emails.

The forensic expert’s preliminary report estimated that tens of thousands of unrecoverable emails had been deleted and that several thousand of those were probably responsive to GN’s discovery requests. Plantronics’ outside lawyer blatantly told the court that Plantronics received no report from the forensic expert, despite referring to the expert’s preliminary report in his billings.

Spoliation Remedy

GN moved the court for a default judgment on the ground of spoliation (a legal term that refers to the destruction of evidence). Motions to deny parties the benefit of a trial are rarely granted. The district court opted to give a jury instruction that allowed the jury to assume that the destroyed emails would have helped GN prove its case.

GN then asked the court for permission to present evidence of the spoliation at trial, including the testimony of its expert witness. Fearing that the issue of spoliation would overshadow the merits of the antitrust dispute, the judge declined to allow the expert to testify. The judge instead instructed the jury that certain facts about the spoliation were true and could be considered in reaching a verdict.

After a six-day trial, the jury found that GN failed to prove any of its claims. GN appealed, arguing that it should have received a default judgment and that the judge erred by denying its expert testimony. The court of appeals rejected the claim that GN was entitled to a default judgment but agreed that it should have been permitted to present expert testimony.

Expert Witness Testimony

GN proposed to call a forensic expert, Dan Gallivan, to testify about the deleted emails. The preliminary report by Plantronics’ expert concluded that Plantronics deleted 952 to 2354 unrecoverable emails that were responsive to GN’s discovery request (plus tens of thousands that were not). Gallivan estimated that ten to fifteen thousand deleted and unrecoverable emails were relevant to the litigation.

The Court of Appeals concluded that Gallivan’s testimony would have been relevant to the underlying claims. Since the jury was entitled to view spoliation of evidence as a material fact, the extent of that spoliation was also a material fact. The jury was not required to draw an adverse inference from the destruction of evidence, so the extent of that destruction was a relevant consideration in deciding whether the inference was appropriate.

The trial court did not fault Gallivan’s reasoning or methodology. His testimony was not excluded on Daubert grounds. Rather, the court did not want the spoliation evidence to overshadow substantive evidence of the alleged antitrust violation. The appellate court construed that analysis as being grounded in Rule 403 of the Federal Rules of Evidence.

Appellate Decision

The trial court did not explicitly balance the probative value of Gallivan’s testimony against the potential prejudice that might be caused by confusing the jury or wasting time. Even if the trial court implicitly conducted the appropriate balancing test under Rule 403, the appellate court decided that the exclusion of Gallivan’s testimony was an abuse of discretion.

In addition to explaining why his estimate was more reliable than the preliminary estimate produced by Plantonics’ expert, Gallivan’s testimony might have shed light on the extent to which Plantronics concealed evidence. If hundreds or thousands of deleted emails were pressuring distributers not to purchase GN’s products, the antitrust case would be stronger than if fewer emails did so.

The most relevant stipulation that the court read to the jury — “It may be that several hundred or even up to 15,000 potentially relevant responsive relevant emails were deleted or destroyed” — was not an adequate substitute for the expert’s live testimony. The appellate court concluded that the vague stipulation “left the jury to consider estimates that were not even in the same ballpark” with no basis for deciding whether Plantronics deleted only several hundred emails or something closer to 15,000 emails.

Finally, the Court of Appeals concluded that requiring GN to rely on a stipulation rather than live expert testimony was prejudicial. “The difference from several hundred to 15,000 could easily have been the difference between applying the adverse inference and not.” Gallivan’s testimony supported GN’s theory that Plantronics engaged in a “massive coverup” and was therefore critical to its proof. The court accordingly granted GN a new trial.

Justice Scales

Texas Court Concludes that Expert Evidence Failed to Prove Employer’s Gross Negligence in Mesothelioma Case

A Texas jury found that Bell Helicopters was grossly negligent in exposing an engineer to asbestos and that the exposure caused the engineer’s mesothelioma. An appellate court reversed the judgment after concluding that the testimony of an expert witness failed to establish Bell’s gross negligence.

Facts of the Case

Bell Helicopters employed Billy Dickson for six years as an engineer. Years after he left that employment, Dickson was diagnosed with mesothelioma, a disease that is caused by exposure to asbestos. Dickson did not work directly with asbestos in his employment with Bell, but he supervised workers who did.

Dickson brought a products liability claim against several defendants. He later added Bell as a defendant. Dickson died before the case went to trial.

Dickson’s estate settled their claims against some of the defendants. Other defendants were dismissed. Bell was the only remaining defendant when the case went to trial.

Because workplace exposure claims are generally preempted by Texas workers’ compensation law, the only surviving legal theory was whether Dickson’s estate was entitled to punitive damages because of Bell’s gross negligence. The estate relied on expert testimony to prove its claim. 

Expert Evidence

Dr. Edwin Holstein is a specialist in internal and preventative medicine. He has a subspecialty in occupational medicine. He has taught other doctors about the health impact of asbestos exposure.

Dr. Holstein testified that bystanders can be exposed to asbestos even if they do not handle the asbestos. Union rules prevented Dickson from touching tools, but he stood within a few feet of employees while they were erecting wall panels to insulate testing areas from heat. The panels were made from millboard.

Dr. Holstein reviewed Dickson’s deposition testimony. Dickson testified that he was present when millboard was cut to make heat-resistant walls. Dickson believed the millboard contained asbestos that was released into the air when the millboard was cut. He described his exposures to asbestos as intermittent but intense. 

It was Dr. Holstein’s impression that Dickson was exposed to asbestos when the millboard was cut. He acknowledged, however, that he did not know who manufactured the specific millboard that was used and did not know the specific amount of asbestos that it contained. He testified that he based his opinion on four studies regarding the air concentration of asbestos caused by the cutting of millboard.

Dr. Holstein opined that Dickson’s asbestos exposure at Bell more than doubled his risk of acquiring mesothelioma. He also testified that laws enacted before Dickson’s employment limited the amount of allowable airborne asbestos in a work environment and that the link between asbestos and mesothelioma was well established before Dickson worked at Bell.

Appellate Analysis

Texas law does not permit an award of punitive damages for an employer’s gross negligence unless the objective evidence establishes that the employer’s conduct created an extreme risk of harm. An extreme risk is one that is likely to cause a serious injury. A plaintiff must also prove that the employer was subjectively aware of that risk but was indifferent to the safety of its employees. 

There is no doubt that mesothelioma is a serious injury. The question before the Court of Appeals was whether the evidence established that Bell’s conduct made it likely that Dickson would acquire mesothelioma and whether Bell was aware of that risk.

Dr. Holstein relied on Dickson’s deposition testimony, but Dickson testified that he did not know who manufactured the millboard and that he only learned recently that the appearance of the millboard was consistent with a product containing asbestos fibers. Dr. Holstein inferred that the millboard contained asbestos based on that testimony and on his knowledge that millboard was a standard product produced by only a few manufacturers. He also knew from studies that the millboard in use at that time contained asbestos.

The Court of Appeals concluded that Dr. Holstein’s testimony fell short of establishing the existence of an extreme risk. While Dr. Holstein testified that the dangers of asbestos were widely known before Dickson’s employment, he offered no evidence that Bell knew the millboard contained asbestos. 

Since Dickson himself had no knowledge at the time that the millboard contained asbestos, the court concluded that Bell’s generalized knowledge that asbestos is hazardous was insufficient to establish its knowledge that cutting millboard created an extreme risk of harm to bystanders. One could argue that Bell should have known the millboard contained asbestos since Bell was using the millboard for its heat-resistant properties, but the question was what Bell subjectively knew, not what it should have known.

Moreover, the studies that Dr. Holstein relied upon to estimate Dickson’s asbestos exposure were all created after Dickson’s employment ended. Bell’s awareness of an extreme risk depended on its knowledge at the time Dickson was exposed to that risk. Dr. Holstein’s testimony did not establish that Bell had any subjective awareness during Dickson’s employment that his proximity to millboard cutting exposed him to the risk of acquiring mesothelioma.

If this case had involved ordinary negligence rather than gross negligence, the outcome might have been different. An ordinary negligence standard would ask what an ordinarily prudent company should have known, not what it actually knew. Given the definition of gross negligence in Texas law, Dr. Holstein’s expert testimony fell short of proving that Bell’s gross negligence caused Dickson’s mesothelioma.

It is doubtful that any expert testimony could have done so, as the knowledge actually possessed by Bell would typically be proved through documents or testimony that revealed what Bell actually knew about the dangers of cutting millboard and when it first acquired that knowledge. The lesson to be learned is that expert testimony can be relied upon to prove facts that are within the expert’s knowledge, but facts regarding the subjective knowledge of another person or business usually need to be proved through fact witnesses or documents.

Malpractice

Court Finds Expert Testimony Supported Part, But Not All, of a Patent Infringement Verdict 

A company called Acantha sued DePuy Synthes Sales and DePuy Synthes Products for patent infringement. Acantha patented an “Orthopedic Implant Assembly” for joining bone segments together during spinal surgery. The implant consists of a plate that is screwed into a bone segment. Once the head of the screw passes through an elastic snap ring, the snap ring returns to its original shape, holding the screw in place.

DePuy claimed that certain products made and sold by DePuy infringed on its patent. Like Acantha’s product, DePuy’s products had a “securing element” (a plate), an “attachment element” (a screw), and a “stopping member” that returns to its original configuration after the attachment element is inserted (as does Acantha’s snap ring).

Acantha argued that two DePuy product lines were infringing. The Vectra line, like the Acantha patented device, screws into a bone segment. The Zero-P VA line, however, screws into the disc space between vertebrae.

Acantha proved its claim to the satisfaction of a jury as to both DePuy product lines and won a judgment of more than $8 million. DePuy then moved the District Court for judgment in its favor as a matter of law.

The question before the court was whether DePuy’s product was the same as Acantha’s. DePuy argued that Acantha’s “securing element” was described as having an “anterior” and “posterior” surface and thus differed from DePuy’s product, which lacked those surfaces. To an ordinary person, most three-dimensional objects can be described as having a front and back or top and bottom, but DePuy argued that the terms had specific meanings that differentiated the two companies’ plates.

Expert Testimony

Acantha relied on the expert testimony of Dr. Sachs, who explained that the anterior surface of the plate was the surface closest to the surgeon — the surface where the screw enters the hole — while the posterior surface was the surface closest to the bone — the surface nearest the place where the screw will exit the hole and enter the bone. A layperson might think of those terms as meaning “top” and “bottom.”

DePuy argued that Dr. Sachs’ construction of the terms, by referencing the sides of the plate where the screw entered and exited the plate, improperly deviated from the court’s claim construction order. Before the trial, the court decided that the “term posterior should be understood to mean an inner portion of the assembly closer to the bone to which the assembly is attached, and the term anterior should be understood to mean an outer portion of the assembly farther away from the bone.”

Court’s Analysis of Zero-P VA Infringement

As to the Zero-P VA infringement claim, the court agreed with DePuy. The court decided that Dr. Sachs based his opinion on an incorrect understanding of the terms “posterior” and “anterior” as the court defined them.

The court noted that an expert can offer an opinion as to how the facts should be applied to the infringement claim, but that an expert must do so in a manner that is consistent with the court’s claim construction order. According to the court, the Zero-P VA could only infringe on Acantha’s product “if it has an anterior surface that is farther from the bone and a posterior surface that is closer to the bone to which it is attached.”

The Zero-P VA is placed between two vertebrae, and the two surfaces are therefore the same distance from the bone. Dr. Sachs’ testimony that the surface of the Zero-P VA where the screw enters is the “anterior” and the surface where the screw exits is “posterior” differed from the court’s determination of what those terms mean. The court accordingly disregarded Dr. Sachs’ testimony.

As defined by the court, the nature of the Zero-P VA plate differed from the plate described in Acantha’s patent. In the absence of Dr. Sachs’ erroneous testimony, the court decided that no reasonable jury could find DePuy’s patent infringed on Acantha’s.

The court’s decision turns on a hypertechnical analysis of the language used in the patent description, but hypertechnical dissection of language is what lawyers and judges do. Perhaps if the lawyers who wrote Acantha’s patent description had expressly defined “anterior” and “posterior” in relation to where the screw entered and exited, the court would have accepted Dr. Sachs’ testimony and allowed the verdict to stand.

Court’s Analysis of Vectra Infringement

The court came to a different conclusion as to the Vectra line, which apparently mimics the Acantha device in all respects. DePuy attempted to identify a nonexistent difference by referring to the entire screw as a “screw head,” but the jury was entitled to rely on Dr. Sachs’ testimony that the spherical shaped, widest part of the screw is the screw head. Since he based that opinion on DePuy’s own documents, the testimony had a factual basis and the jury was entitled to accept it.

The jury was also entitled to reject the testimony of DePuy’s expert that screw threads are part of the screw head. Apart from the fact that the testimony is contrary to an everyday understanding that the head and threads are distinct parts of a screw, it was up to the jury to decide which of the two experts to believe.

Court’s Order

The court reduced the jury’s award of damages to about $4.3 million to account for its decision that DePuy’s Vectra line, but not its Zero-P VA line, infringed Acantha’s patent. Expert testimony therefore contributed to a sizeable verdict, although it did not support the entire verdict that the jury returned.

Fifth Circuit Affirms Admission of Expert Testimony to Prove Mortgage Lender Made False Claims

A False Claims Act lawsuit against a mortgage lender depended on the expert testimony of a loan underwriter. The government also relied on an expert to select loan files randomly for the underwriter to review. Daubert challenges to those two experts failed in the trial court. The Court of Appeals for the Fifth Circuit affirmed the court’s admission of the expert testimony.

Facts of the Case

The US government sued Jim Hodge and the two mortgage companies he owned for defrauding the government. One of those companies originated loans and the other funded them.

Some of the mortgage loans were insured by the Federal Housing Administration (FHA). Eligibility for insured loans was determined by standards created by the Department of Housing and Urban Development (HUD). The loans were primarily available to first time homebuyers who met HUD’s guidelines.

The company that funded the loans was certified as a “direct endorsement lender.” It was authorized to determine eligibility for the loans on HUD’s behalf. 

A branch manager who worked for the lending company sued Hodge and his companies on behalf of the government, alleging that they fraudulently obtained FHA insurance for loans that later defaulted. The government intervened in the lawsuit.

After a five-week trial, the jury found that the lending company misrepresented its compliance with the FHA lending guidelines. It also found that Hodge and the loan origination company misrepresented that loans were originated by branches that were registered with and approved by HUD.

Applying federal laws that triple damages awarded by the jury, the court entered judgment against Hodge and his loan origination company for about $23 million and against the lending company for about $269 million. On appeal, the defendants challenged the methodologies used by the government’s expert witnesses.

Daubert Challenge to Sampling Methodology.

Katherine Ensor testified as a statistical sampling expert. She generated random samples of loan files that other experts relied upon as representative of the defendants’ lending practices.

The defendants objected to the government’s request for all its loan files and argued that discovery should be limited to a random sample of files. The parties agreed to use a sampling of loan files, including files that did and did not result in insurance claims, but could not agree on the number of files that should be included in the sample.

The defendants complained that Ensor’s methodology was unreliable because she failed to control for loans that defaulted for obvious reasons. The appellate court determined that the defendants waived that objection by advising the trial court that they did not disagree with Ensor’s methodology, but only disagreed with the sample size she proposed. 

The number of files that Ensor chose for sampling was larger than the number proposed by the defendants. Since the defendants could not explain how using a larger sample size made the sampling unreliable, the court rejected the challenge to Ensor’s methodology.

Daubert Challenge to Underwriting Testimony

The government called Richard Payne to testify about FHA loans that were made to borrowers who were not eligible for FHA insurance. Payne reviewed 460 loans that were randomly selected by Ensor. He determined that 240 of the loans were not eligible for FHA insurance because they failed to meet HUD’s underwriting guidelines.

The defendants complained that Payne’s methodology was unreliable because he applied his own standards rather than HUD’s standards. Payne testified, however, that his team applied the standards specified in the HUD Handbooks that were in effect at the time, supplemented with FHA mortgagee letters and an FHA guide to automated underwriting.

Payne created a spreadsheet that identified each of the 240 loans he regarded as noncompliant with HUD guidelines. For each loan, he identified the specific way in which the loan failed to comply and made reference to the specific guideline that the loan failed to meet. Since the defendants failed to identify a single instance in which Payne substituted his own standards for those of HUD and the FHA, the court rejected their challenge to Payne’s methodology.

Defense Attorneys Request Approval of Sleep Deprivation Expert

The defense attorneys of a man charged with killing an Iowa woman are now requesting the state to pay for a sleep deprivation expert and that the state pay for that expert’s fees.

The Killing

On July 18, 2018, 20-year-old University of Iowa student Molly Tibbetts disappeared after going on a run in her hometown of Brooklyn, Iowa.

While investigating Tibbitts’ death, investigators found a home surveillance video that showed a car following a woman running.  After watching it for hours, investigators found clues that led them to Cristhian Bahena Rivera, 24, an undocumented immigrant.

Rivera, who did not resist when police detained him, told authorities that he saw Tibbits and pursed her. He got out of his car and started running beside Tibbetts. She warned him she would call the police, which angered him. According to the police, Rivera said that he blacked out at some point and later woke up at an intersection. He realized that he had put the woman in the trunk of his car and when he took her out, he saw blood on the side of her head.

Rivera led the police to Tibbets’ body, which was in a cornfield, covered with corn leaves. Investigators determined that Tibbets had been stabbed to death.

Rivera was charged with the first degree murder of Mollie Tibbetts.  Bail was set at $1 million.

Because Rivera is an undocumented immigrant, this story made national news.  President Trump even made reference to the case at a rally in Charleston, West Virginia.  President Trump said, “You heard about today with the illegal alien coming in very sadly from Mexico. And you saw what happened to that incredible beautiful young woman. Should have never happened. Illegally in our country.  We’ve had a huge impact but the laws are so bad, the immigration laws are such a disgrace. We’re getting it changed but we have to get more Republicans.”

Vice President Mike Pence also made a statement about Tibbitts’ death.  He wrote a tweet stating, “Heartbroken by the news about Mollie Tibbetts. Mollie was an amazing young woman and we are praying for her parents, brothers & friends in this time of unimaginable grief. … We commend the swift action by local, state, & federal investigators working in Iowa in apprehending an illegal immigrant, who’s now charged with first-degree murder. Now, justice will be served. We will never forget Mollie Tibbetts.”

Unfortunately, neither the president nor the vice president noted that most violent crime in the United States is committed by American citizens. The crime rate for undocumented aliens is lower than the rate of crime committed by native-born citizens, but that isn’t the kind of information that stokes passions at political rallies.

Defense Pretrial Motions

Cristhian Rivera’s defense attorneys filed a motion to request the court’s approval to appoint expert witness Dr. Kimberly Fenn of Michigan State University.  Dr. Fenn is an expert in the area of sleep deprivation and its effects on the actions and statements of the sleep-deprived. The motion also requested that the state pay Dr. Fenn’s fees.

In the motion, the defense team wrote, “Defendant has raised the issue of voluntariness of his statement to law enforcement as well as whether any waiver of a purported advisement of Miranda rights was knowing and voluntary.”

Rivera’s attorneys are also asking that the interpreter who was court-appointed to assist their client be given expert witness status, in order to allow her to be compensated. The motion claims “neither the State Public Defendant nor State Court Administration want to compensate Ms. Gardner for the services she has rendered to date. Citing various bureaucratic reasons, Ms. Gardner is being characterized as simply providing interpreter services and thus cannot be compensated.” The defense team states that Gardner’s translation of Rivera’s interview with police allows the defense to challenge the accuracy of officers’ Spanish and the accuracy of the transcript that was provided by the government.

The motion asks for a $2,500 for Dr. Fenn, $3,000 for DNA expert Dr. Michael Spence, and for the interpreter to be given expert witness status and her previous claims for compensation be approved.

Attorneys to Appeal Decision to Not Allow State of Mind Expert Testimony

The attorneys for a man who is accused of shooting a youth football coach have announced that they plan to appeal a trial court judge’s decision not to allow an expert witness to testify regarding the defendant’s state of mind.

The Crime

At around 11:20am on December 12, 2017, a shooting was reported around outside the Huntington Mart Marathon along Hal Greer Boulevard in West Virginia. KaFrederick “Bae Bae” McEachin was shot and killed in broad daylight.

According to Huntington Detective Chris Sperry, surveillance video and eyewitness accounts revealed that the shooting began inside of the store and then moved to the parking lot.

The video shows McEachin opening the door of the store for Antwon Starkey, who then walked through the doors and passed by a few people before pulling a gun out of his jacket pocket and shot McEachin twice. An unarmed McEachin ran out of the store and collapsed on the pavement. Starkey followed after McEachin and shot him again — once in the head and once in the back.

A few hours later, Starkey called 911, identified himself as the shooter, and said he was going to turn himself in. Starkey was arrested a few hours later, just two blocks from where the shooting took place.

According to authorities, Starkey said he had shot McEachin after he heard the victim was connected with the shooting of his 14-year-old stepdaughter two weeks prior to the shooting. Starkey also stated that he believed McEachin had also targeted both Starkey and his wife.

Antwon Starkey, 32, was charged with murder and being a felon in possession of a firearm in connection with the death of KaFrederick “Bae Bae” McEachin, 25.

Pretrial Motions

Starkey’s defense attorney filed a motion to have an expert witness testify about Starkey’s state of mind during the shooting. Cabell Circuit Judge Gregory Howard denied the motion. Defense attorney Abe Saad stated that he plans to appeal that decision to the West Virginia Supreme Court of Appeals. Because of Saad’s intent to appeal this decision, the trial date for Starkey has been pushed back.

At a hearing announcing his intent to appeal the decision, Saad argued that Judge Howard had twice reversed decisions that had originally given him full access to detective notes and would allow an expert witness to testify regarding Starkey’s state of mind at the time of the slaying and whether the previous shooting provoked him to shoot McEachin.

Orders issued by the court reflect that a redacted version of the detective notes had been turned over to the defense and that the expert would not be allowed to testify.

Judge Howard said he had wrestled with the decisions for a long time to try to keep a fair trial for both sides and did not issue signed orders until the final decision had been made. Judge Howard stated, “What I do recall is allowing the defense to have those notes, which I wrestled with that decision to some degree, but ultimately erred on the side of allowing the defendant to have them, but also doing some mild redaction.”

Judge Howard also noted that defense failed to object to his decision to not allow the expert witness to testify until almost 30 days after the order was issued. He said, “Obviously the defense will argue provocation, and that is certainly within their right. . . . But to have an expert say that — my ultimate decision is that that’s not appropriate and it does step into the jury’s (duty).”

Starkey was set to go to trial the last week of October; however, the trial has now been pushed back until February 10, 2020 to give Saad and his co-counsel time to familiarize themselves with the case and to appeal the rulings to the Supreme Court.

Flag of the state of New Jersey

NJ Tax Court Prohibits Assessors from Acting as Experts

A New Jersey Tax Court judge has ruled that a municipal tax assessor should not have served as an expert in a case challenging the property value set by another municipal tax assessor, effectively stopping municipal experts from accepting certain side jobs as appraisal experts.

The Tax Dispute

A Hazlet, New Jersey property owner, VNA 1105 State Hwy 36, LLC, appealed its tax assessments for the period of 2013 to 2017.  Hazlet had valued the property at issue at $4.2 million to $4.7 million over that five-year period.

The Expert Dispute

VNA hired Ted Lamicella, who is also the tax assessor in Wall Township, New Jersey, to appraise its property in suport of its argument that its property value should be lowered. Hazlet’s attorney, James Gorman, challenged Lamicella’s appointment, citing the New Jersey rule that prohibits municipal assessors from appearing as an expert witness against another assessor.

“No assessor shall appear before the board as an expert witness against another assessor or taxing district within the State except to defend the assessment of his taxing district.”  N.J.A.C. 18-12A-1.9(l).

However, VNO’s attorney, David Wolfe, argued that this rule only applied to appeals before county tax boards, not in tax court. He also argued that this prohibition would unfairly prejudice property owners because it would significantly limit the pool of experts that are available to them in their appeals.

The Tax Court Ruling

New Jersey Tax Court Judge Mala Sundar decided that the prohibition against municipal assessors working as appraisal experts also applied to state tax court. Judge Sundar reasoned that tax assessors are supposed to act as impartial judges of property values so that taxpayers trust that the system is fair. Judge Sundar explained that when municipal tax assessors work for someone besides the government, it could undermine the public trust in the system or give the impression that assessors give preferential treatment to the attorneys who hire them as experts in tax appeals.

Judge Sundar wrote, “It is reasonably foreseeable that the public would consider such an appearance as evidence of a lack of confidence in an assessment by an assessor, or an elevation of personal financial interest, which would impugn the integrity of any assessment and the significance of any assessor’s role as a quasi-legislative agent of the State.”

It could also be argued that limiting appraisers to giving pro-government testimony undermines faith in their integrity. In any event, VNO will be allowed to find a new appraiser who is not a municipal tax assessor to represent it in its appeal.

This is the second time that Lamicella’s outside work as an expert witness in tax appeal cases has been called into question. In 2017, the Monmouth County Tax Board of Commissioners questioned whether Lamicella had violated state rules for his role as an expert in a tax appeal that was filed in Ocean Township.

Tax assessors do not need approval before taking outside employment; however, they are required to disclose outside employment on financial disclosure forms.

Wall Township administrator Jeff Bertrand has stated that he’s discussed the issue with Lamicella and he will no longer be working as an expert.

Judge in courtroom

United States Supreme Court Allows Court of Appeals Assessment of Expert Testimony Stand Over Jury’s

The United States Supreme Court has denied a petition for certiorari filed by Imperium IP Holdings (Cayman) Ltd, allowing a Court of Appeals’ opinion regarding an expert to stand over the assessment by the jury.

Original Lawsuit

Imperium IP Holdings (Cayman) Ltd. is a holding company for intellectual property rights that were owned by ESS Technology. In the early 2000s, ESS was a leader in developing and manufacturing digital cameras for cell phones. ESS sold its products across the globe to companies such as Motorola, Ericsson, LV, Nokia, and Samsung.

ESS patented its own digital camera innovations and also acquired the portfolio of another company called Pictos Technologies, Inc., which was the owners of U.S. Patent No. 6,271,884, or the ‘884 Patent. The ‘884 Patent enables proper video imaging under fluorescent lighting by eliminating the flicker that is undetectable by the human eye, but captured by video recordings.

Beginning in 2010, Imperium began enforcing its patent rights against a number of multinational corporations that had used its technology in video recording devices, single-lens reflex cameras, automobiles, and cellphones. Seven of the eight largest cell phone manufacturers entered into a licensing arrangement to use Imperium’s technologies, including the ‘884 Patent. The total value of these licenses exceeded $22 million. Only Samsung refused to enter into a licensing agreement.

In June 2014, Imperium sued Samsung in the Eastern District of Texas, alleging that Samsung willfully infringed three patents related to digital camera technology.

After a six-day trial, a jury found that Samsung had willfully infringed Imperium’s patent rights. The jury found Samsung liable for a judgment of $4.84 million. The district court awarded treble damages in light of Samsung’s knowing and willful infringement, discovery misconduct, and repeated false statements and misrepresentations.

U.S. Court of Appeals for the Federal Circuit

Samsung appealed. The U.S. Court of Appeals for the Federal Circuit reversed the verdict. In its decision, the court stated that it agreed with Samsung that “that the only reasonable finding on this record is that the ’884 patent claims at issue here are invalid for anticipation.”

The court noted that it came to this decision based upon the court’s interpretation of the expert witness testimony during the jury trial.

Imperium IP Holdings Petition

In July 2018, Imperium Holdings petitioned the United States Supreme Court for a writ of certiorari, arguing that the Court of Appeals for the Federal Circuit had usurped “the Constitutionally-mandated role of juries to find the facts and decide issues of witness credibility.”

The question presented to the Supreme Court was “Whether an appellate court may reverse a jury verdict based on its own view that expert testimony was credible, ‘unrebutted,’ and ‘uncontradicted,’ or instead whether the Seventh Amendment requires the jury to make determinations about credibility and the weight of the evidence in determining whether a party has properly carried its burden of proof.”

The United States Supreme Court denied the petition, which allows the decision by the U.S. Court of Appeals for the Federal Circuit to stand.

Disabled man, wheelchair

Indiana Court Affirms Admission of Expert Testimony Regarding Personal Injury Damages

Nolan Clayton and Gregory Smith became friends while working together at a Stacked Pickle bar. Smith volunteered to work during a special event at a Stacked Pickle in Indianapolis. He invited Clayton to attend the event as a guest.

Smith drove Clayton to the bar. Clayton began to drink. After about an hour, Smith decided there were enough employees to cover the event so he stopped working and joined Clayton. They both became intoxicated.

After the event ended, Smith was asked to leave. Clayton left with him. A Stacked Pickle employee locked the door and called a taxi to pick up the two men outside the bar.

For reasons that neither man recalls, Clayton drove Smith’s truck with Smith as a passenger. They were driving away from the bar as the taxi arrived. Clayton crashed the truck into a tree. Clayton had minor injuries but Smith’s neck was broken. He is now a quadriplegic.

A series of claims followed against various insurance companies. The insurer of Smith’s truck (Progressive) would not pay Smith, alleging that Smith’s policy did not cover injuries to Smith caused by another driver. Other insurers settled and Smith assigned his claims against Progressive to Allstate, a settling insurer that provided coverage through a policy issued to Clayton’s parents.

Smith eventually sued Clayton. Liability was largely conceded; the trial focused on comparative negligence and damages. The jury awarded Smith $35 million and found Clayton to be 60% responsible for Smith’s injuries. The trial court therefore awarded judgment for Smith in the amount of 60% of the verdict, or $21 million.

Clayton appealed, alleging that the trial court erred when ruling on the admissibility of expert testimony. In each case, the trial court allowed experts to testify over Clayton’s objections. Clayton appealed, and the Indiana Court of Appeals affirmed the trial court’s decision to admit the testimony of each expert.

Admissibility of Expert Testimony in Indiana

Indiana is not a strict Daubert state, although the state supreme court has concluded that Daubert provides “useful” guidance when courts apply Indiana’s rules of evidence. The state’s evidence code provides that expert scientific evidence “is admissible only if the court is satisfied that the expert testimony rests upon reliable scientific principles.”

Once the court determines that the expert has based testimony on sound principles, it is up to the jury to decide how much weight the testimony deserves. Unlike some federal and state judges who follow the Daubert rule, Indiana judges do not substitute their own assessment of the facts upon which the expert relies for the jury’s view of those facts.

Indiana courts wisely follow the traditional rule that vigorous cross-examination and competing evidence will expose flaws in an expert’s opinion, and that questions about the reliability of facts upon which an expert relied are best resolved by juries. If an expert has based testimony on sound principles, the accuracy of the expert’s opinion is typically a question that an Indiana jury should determine.

Smith’s Vocational Expert

Smith moved to exclude the expert testimony of Sara Ford, a vocational economist. Ford testified that Smith’s lifetime income loss would exceed $2.1 million. She based that calculation on the understanding that Smith is totally disabled for occupational purposes.

Clayton complained that Ford did not have an adequate foundation for her belief that Smith was 100% occupationally disabled because she relied on “outdated” medical records and ignored the fact that Smith wanted to work. Clayton also argued that Ford did not consider the local job market and that she used “boilerplate” language in her expert report.

The court noted that Ford assigned a 100% disability rating to Smith because he was unable to perform manual tasks with his hands. Her disability rating was supported by medical testimony that Smith is a quadriplegic, that he only retained some function in his biceps, and that his prognosis for improvement was poor. The foundation for her opinions was subject to vigorous cross-examination and the jury was entitled to determine how much weight the opinions deserved.

The appellate court concluded that “the breadth of Ford’s research, the methodology used to forecast lost wages, and the purported lack of corroboration of her definitive conclusion” regarding Ford’s disability were matters for the jury to determine. The appellate court did not explicitly address the “boilerplate” argument, presumably because professionals, including lawyers and judges, typically rely on boilerplate language when it is suitable for a particular document.

Smith’s Medical Expert

Dr. Ralph Buschbalter testified about Smith’s current medical condition and poor prognosis, including a probable 20-year reduction in his life span. He also testified about nine future health conditions for which Smith was “at risk,” including renal failure, heart disease, and deep vein thrombosis.

Clayton asked to exclude Dr. Buschbalter’s testimony about future health risks on the ground that the testimony was speculative. However, Dr. Buschbalter candidly testified that the risk of each condition developing was either low or impossible to predict.

The fact that a future complication is unlikely to be relevant does not mean that the risk is speculative and does not make testimony about the risk irrelevant to an assessment of damages. The appellate court found that the trial court appropriately exercised its gatekeeper function by allowing Dr. Buschbalter’s testimony. How much weight to give the risks he described when awarding damages was for the jury to decide.

Smith’s Life Care Planner

Finally, Clayton asked the trial court to exclude the expert testimony of Debra Berens, a life care planner. Clayton complained that Berens had no foundation for opinions that rested on economic projections, given that she was not an economist.

Berens reviewed Smith’s medical records to determine his limitations, then researched the cost of meeting his future needs and coping with his disability. She noted modifications of his home that were needed to make it wheelchair-accessible, considered the future cost of wheelchair replacements, and estimated the expense of future medical care, massage therapy, medications, psychological services, and transportation.

As life care planners commonly do, Berens relied on national databases to determine some of those costs. She examined data compiled by the Veterans Administration to estimate the cost of wheelchair replacement. Since experts in life care planning routinely rely on those sources, Berens was entitled to consider them in forming an expert opinion.

Some of the future expenses were not reduced to present value. In other cases, she relied on an economist to perform a present value calculation. Clayton complained that her testimony lacked foundation because no economist testified in support of her calculations and because not all of her calculations were reduced to present value.

Estimates of future costs are necessarily uncertain because interest and inflation rates change as economic conditions change. A thousand dollars invested today might be worth more than a thousand dollars a year from now if the investments are prudent. On the other hand, a wheelchair that costs a thousand dollars today might cost more than a thousand dollars in the future because of inflation. Present value (the amount of money that should be invested today to create a targeted amount of money on a future date) is a problematic concept because interest and inflation rates are offsetting, at least to some degree.

The appellate court held that juries generally understand the concepts of interest and inflation. The court held that expert testimony is not necessarily required for a jury to decide whether to accept cost estimates that are not reduced to present value, since juries are entitled to give such weight to those estimates as the jury thinks they deserve.

Although the court did not say so, the general rule is that the defendant has the burden of introducing evidence to reduce a future loss to its present value. If Clayton wanted to argue that the jury should award a present value rather than the full future cost of Smith’s life care requirements, Clayton should have called his own expert to present that calculation to the jury.