Courts Deal With “Dual-Hat” Experts: Part I

Thomas E. Spahn | McGuireWoods

Fed. R. Civ. P. 26(a)(2)(B)(ii) governs testifying experts’ duty to produce “the facts or data considered by the witness in forming” his or her opinion. Fed. R. Civ. P. 26(b)(4)(D) governs dramatically different non-testifying consulting experts. Not surprisingly, witnesses might switch from one role to the other, and also might possess arguably pertinent facts from direct or tangential participation in the pertinent underlying events. This type of expert is commonly called a “dual-hat” expert, whose involvement can raise subtle issues.

In Johns v. CR Bard (In re Davol, Inc.), Case Nos. 2:18-md-2846 & 2:18-cv-1509, 2021 U.S. Dist. LEXIS 105022 (S.D. Ohio June 4, 2021), plaintiff alleged injuries from hernia mesh complications. Plaintiff hired Dr. Nagy as a non-testifying consulting expert, and later designated him as a testifying expert — but refused to produce documents he created while reviewing defendants’ documents. The court ordered plaintiff to produce those documents. First, “[e]ven crediting Plaintiff’s contention that Dr. Nagy was a consulting witness initially,” the court ruled that “[t]he proponent of a dual-hat expert, i.e.[,] an expert that is both a consulting and testifying expert” may only withhold “‘materials generated or considered uniquely in the expert’s role as [non-testifying] consultant.'” Id. at *11-12 (citation omitted). The court explained that Dr. Nagy “‘cannot be expected to draw a mental line in the sand between information gleaned’ in an earlier, consulting context and information later learned as a testifying expert when the subject matter is so similar.” Id. at *12 (internal citation omitted). The court also noted that the testifying expert rule requires such experts to produce “all materials reviewed or considered by the expert, whether or not the expert report ultimately refers to those materials as a basis for his or her opinions.” Id. at *6 (citation omitted). The court emphasized that “[a]mibiguities are resolved in favor of discovery.” Id.

Litigants often retain an expert first as a non-testifying consulting expert — to be sure that the litigant likes the expert’s conclusions, demeanor, etc. But litigants must carefully consider what such an expert might be required to produce upon morphing into a testifying expert. Next week’s Privilege Point will address a “dual-hat” expert scenario another court addressed about two weeks later.

Courts Deal With “Dual-Hat” Experts: Part II

Thomas E. Spahn | McGuireWoods

Last week’s Privilege Point addressed a court’s careful sorting out of discovery issues implicated when a non-testifying consulting expert created documents arguably related to his later role as a testifying expert. About two weeks later, the Southern District of New York (Judge Caproni) dealt with other issues involving non-testifying experts.

In In re Commodity Exchange, Inc. Gold Futures & Options Trading Litig., Nos. 14-MD-2548 (VEC) & 14-MC-2548 (VEC), 2021 U.S. Dist. LEXIS 113760 (S.D.N.Y. June 17, 2021), plaintiffs alleged that defendants comspired to manipulate the London daily benchmark gold price. Defendants sought to depose plaintiffs’ non-testifying consulting experts, but the court rejected defendants’ motion. First, defendants argued that plaintiffs’ non-testifying experts were “fact witnesses and not experts,” because they were familiar with gold pricing issues from their previous work. Id. at *24. The court acknowledged that Fed. R. Civ. P 26(b)(4)’s Advisory Committee’s Notes state that experts may be deposed about information they acquired as “an actor or viewer with respect to transactions or occurrences that are part of the subject matter of the lawsuit.” Id. at *25. But the court concluded that plaintiffs’ experts had not “traded gold or gold-based instruments or participated in any way in the Fixing process” – and that “[b]y Defendants’ logic, most experts who analyze facts are fact witnesses who fall outside the ambit of Rule 26(b)(4)(D), swallowing any protections afforded by the Rule.” Id. at *26-27. Second, the court found that plaintiffs’ experts had waived certain work product protection – accurately noting that “[c]ourts are split as to whether [non-testifying consulting experts’] protections can be waived.” Id. at *29. After concluding that the non-testifying consulting expert Rule did not protect plaintiffs’ experts from depositions, the court nevertheless denied defendants’ motion to depose them – concluding that “any additional information obtained from deposing [plaintiffs’ non-testifying consulting experts] would be unreasonably cumulative or duplicative of the information Defendants should have already received via fact discovery.” Id. at *37.

Litigants and their lawyers should always consider both non-testifying and testifying experts’ source of information – especially if these experts move from one role to the other.

Idaho District Court Affirms Its Role as the Gatekeeper of Expert Testimony

Melissa Kenney | The Subrogation Strategist

Many subrogation claims involving fire losses rely heavily on expert testimony. Expert testimony is admissible under Federal Rule of Evidence 702 if it is both relevant and reliable. In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), whose standard has been incorporated into Federal Rule of Evidence 702, the Supreme Court instructed federal trial courts to act as a “gatekeeper” of expert testimony, giving them the power to exclude expert testimony that is not supported by sufficient evidence. In Maria Fernanda Elosu and Robert Luis Brace v. Middlefork Ranch Incorporated, Civil Case No. 1:19-cv-00267-DCN, 2021 U.S. Dist. LEXIS 14449 (D. Idaho Jan. 22, 2021) (Brace), the United States District Court for the District of Idaho exercised its gatekeeper role when it granted in part and denied in part the defendant’s motion to exclude expert testimony pursuant to Daubert and Federal Rule of Evidence 702.

Brace, involved a fire at a vacation cabin in McCall, Idaho. The cabin, owned by Maria Elosu (Elosu) and Robert Brace (Brace and collectively with Elosu, Plaintiffs) was part of a homeowner’s association called Middlefork Ranch, Incorporated (MFR). The cabin had a “wrap around” deck with a propane-fired refrigerator on the north side. On the day before the fire, Brace stained the deck using an oil-based stain. That night, Elosu smoked cigarettes on the deck. The next morning, Plaintiffs used rags to clean up excess oil from the deck and an MFR employee changed the propane on the refrigerator and relit the pilot light. At 4:00 p.m., a fire started in or around the cabin while no one was home. The fire was discovered by a group of contractors who testified that the fire was isolated to the east side of the cabin when they first arrived. Importantly, one witness testified that there was no fire and no flames around the propane-fired refrigerator. The fire destroyed the cabin and the contents within.

Plaintiffs sued MFR for negligently starting the fire and alleged that the MFR employee had knowledge of the hazard when he lit the refrigerator pilot light on the oil-stained deck. To prove its claim, Plaintiffs retained a fire investigator, Michael Koster (Koster), who inspected the scene ten months after the loss occurred, and a mechanical engineer, Richard Mumper (Mumper), who conducted various lab tests. Both experts concluded that “the fire started on the north deck as a result of excess oil vapors being ignited by the pilot light on the propane fridge.” In anticipation of trial, MFR filed a motion to exclude the opinions of Plaintiffs’ experts.

Motion to Exclude Koster’s Expert Opinion Regarding the Fire Origin and Cause

With respect to Koster, MFR argued that his conclusions should be excluded because they were speculative and not supported by evidence. The court agreed, finding that Koster failed to satisfy the standards set forth in Daubert and Federal Rule of Evidence 702 because his conclusion was mere speculation, either contrary to or unsupported by evidence in the record. Among other flaws, the trial judge focused on the fact that Koster, by his own admission, stated there was no concrete physical or testimonial evidence to support his theory that the fire started on the north side of the deck.

The court also took issue with the fact that Koster relied on an interested party’s version of the facts without conducting an independent investigation to verify the accuracy of those statements. He discounted other possible explanations for the fire, such as the spontaneous combustion of the oil rags and the careless disposal of smoking materials, based “solely off of the information that was given to [him] by [Plaintiffs].” Additionally, none of the witness interviews or transcripts supported his theory, including the testimony of the disinterested construction workers that reported observing fire on the east side of the cabin when they first arrived. Koster explained his conclusion was a “hypothesis” and that because he could not disprove it, “then there’s a high probability that it did occur.” As stated by the court: “Failing to disprove a theory that is speculative in the first place . . . would swallow the rules as applied to experts if allowed. If an expert could throw out any idea – and claim that so long as it remains unproven it’s a viable option – without oversight, the [c]ourt’s gatekeeping role is meaningless.”

Motion to Exclude Mumper’s Expert Opinion Regarding the Cause of the Fire

Plaintiffs hired Mumper to examine the remnants of the appliances including the propane refrigerator. Mumper conducted various lab tests, examined the evidence, found no abnormal electrical activity, and concluded there was no mechanical malfunction with the refrigerator that caused the fire. He goes on to opine, however, that the refrigerator pilot light caused the fire.

MFR asked the court to exclude Mumper’s opinion regarding the cause of the fire because he was not a certified fire investigator. The court noted that, because he worked for a firm that specialized in forensic fire investigations, Mumper might be qualified to offer opinions as to the origins of the fire. In the end, the court held that it would not preclude Mumper from testifying “about the tests he ran, his conclusions about those tests, and his opinion that those things did not start the fire.” On the other hand, the court ruled that Mumper could not testify as to the cause of the fire because his opinions lacked a proper foundation. The court based its decision on the fact that Mumper’s role appeared to be limited to investigating whether the refrigerator (or other appliances) malfunctioned and that he did not independently investigate other possible causes.

The primary purpose of an origin and cause investigation is to determine where the fire started and why. Expert testimony is admissible under Federal Rule of Evidence 702 if it is: (1) from a qualified source, (2) based on sufficient facts or data, and (3) will assist the trier of fact in resolving an issue that is relevant to the case. As established in Brace, it is generally not enough for a consulting expert to reach a conclusion as to the origin of a fire when his/her conclusion is contrary to or unsupported by evidence in the record.

Assess Whether Your Witness Is Able to Counterpunch

Dr. Ken Broda-Bahm | Holland & Hart

Attorneys know the feeling: With some of your witnesses, you just want to keep it simple, encourage them to keep their heads down, and limit the possible damage. With any luck, they’ll get through it with minimal damage to your case. But for other witnesses, testimony is an opportunity. The right witness, and the prepared witness, will be able to say things that advance your case and make it harder for the other side to win. Preparing the right kind of witness is a chance to inflict some damage on the other side.

But how do you know when the witness you have is capable of safely leaving the world of “Yes or no,” and able to enter the world of the artful parry? If you fill the wrong vessel with too much confidence, they could end up missing the meaning of opposing counsel, they could say things that you don’t want in evidence, or they could take it too far by being too clever and too argumentative with the lawyer on the other side. The bottom line is, you need to consciously assess to see what your witness is capable of. If they’re fuzzy or fragile, then you probably want to keep their answers to a minimum. But if they’re tough and smart, then you want to teach them sensitive and smart ways to punch back on your adversary’s questions. It all starts with assessing the witness.

Assess Occupation and Mental Habits

When advising on jury selection, I always feel that if you know what someone does every day, five days a week, you’ve got a good start on knowing them. The same goes for witnesses. If someone works in a repetitive context where they aren’t called upon to exercise judgment very often, it will be hard for them to rise to the challenge of powerful testimony. But if someone works in a context where they’re expected to be analytical, sensitive, and professional, it will be less of a challenge. There are exceptions of course, in both categories, but I’ve found that executives, managers, doctors, and academics will, more often than not, have the native skills to be more thoughtful, assertive, and empowered in the ways they answer opposing counsel’s questions.

Assess Attitude

In addition to their capability and experience, it is also essential to assess their attitudes. Are they comfortable that they understand enough about the opposing counsel’s tactics and objectives, and about their own testimony, that they can feel comfortable pushing back against that adversary’s language and assumptions? Even if they could, they may not want to. Of course, part of the attorney’s role as a counsellor is to get them to the point that they will do as well as they can. But the legal process can be stressful, and if you add in the force of accusation for a defendant, the psychological barriers can be too high. Alternately, if you have someone who is a little too eager to mix it up with counsel, then they could easily come off as argumentative or evasive when they’re really trying to be assertive. Ultimately, you’re looking for a witness who can be savvy, but also patient and calmly persistent.

Test

Ultimately, the only way to be sure that a witness can effectively testify in a way that moves from ‘not hurting’ to ‘helping’ your case is to see them do it. Hold several practice sessions where you don’t just talk about testifying, but you actually practice it. Play the role of the lawyer on the other side, using as much as you know about their substance and their style, and see how your witness handles it. For very important testimony, I have found that three meetings is often the right number: the first to assess the witness and teach sensitivity in responding, the second to practice it and really nail it down, and the third to see if it sticks after they leave and come back.

Many attorneys will say that giving testimony is largely an act of defense: like being on the receiving side in a volleyball game, you can’t score, but you can prevent them from scoring. That is a largely accurate and useful sentiment. Still, when your witness has the ability, attitude, and training, they could use some assertiveness in both preventing those scores, and maybe scoring a point or two back. It all starts with assessing the witness.

Recent Court Order Excluding Expert Testimony Offers Useful Reminders and Lessons for Construction Litigants

Amandeep S. Kahlon | Bradley Arant Boult Cummings

Construction claims often feature supporting testimony from design and/or scheduling experts, and exclusion of that testimony either by disqualification of the expert or a finding that the testimony is otherwise inadmissible can prove fatal to your claim or defense. States may vary in their requirements for admissibility of expert evidence, but most states follow some variant of Federal Rule of Evidence 702. Rule 702 provides that an expert may testify in the form of an opinion or otherwise if:

(a) The expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) The testimony is based on sufficient facts or data;
(c) The testimony is the product of reliable principles and methods; and
(d) The expert has reliably applied the principles and methods to the facts of the case.

The recent district court order in American Contractors Indemnity Co. v. Reflectech, Inc. granting a motion to strike an expert demonstrates the importance of satisfying the requirements for admission of expert evidence under Rule 702 and other like statutes. In that case, a surety sought indemnity for payment on bonds issued to a subcontractor that defaulted on a roofing subcontract. The surety investigated the general contractor’s claim for default against the subcontractor, settled with the general contractor for approximately $400,000, and then filed suit against the subcontractor for breach of their general indemnity agreement.

The defendant subcontractor proffered an expert to opine on the adequacy of the surety’s investigation and the appropriateness of payment of the general contractor’s bond claims. In moving to strike this expert, the surety argued (1) the expert should be disqualified due to lack of experience, and (2) the expert testimony was inadmissible because it was not based on sufficient facts or data as required under Rule 702(b). The court focused on the second prong of the surety’s argument in granting the motion to strike.  The court found that the expert’s opinion was not based on sufficient facts or data because of several admissions from the expert during his deposition. Specifically, the surety persuaded the court with the following facts derived from the expert’s deposition testimony:

  • The expert admitted he never visited the project site and interviewed only one individual, the owner of the subcontractor, before drafting his expert report;
  • The expert admitted he never reviewed the surety’s records regarding the general contractor’s claim and did not know what information the surety’s investigation uncovered because that information was never provided to him;
  • The expert testified that the surety’s records would have been helpful in forming his expert opinion (the subcontractor was unable to provide any explanation for failure to provide this material to the expert when it had been produced by the surety); and
  • The expert stated that he did not review the settlement portion of the general indemnity agreement, which he had opined was unconscionable.

The facts relied upon by the court highlight the importance of selecting and managing experts in construction disputes. When selecting an expert, a party should be mindful of the expert’s prior testifying experience and his or her approach to investigating a claim or subject area for which an opinion is required. A party should also ensure its expert receives and reviews all the documents and information necessary to formulate his or her opinion. To be successful, this process requires an active dialogue with the expert throughout the course of a matter.  For example, document productions from other parties and deposition testimony from witnesses will uncover additional information an expert may need to support his or her opinions. Consistent engagement with an expert will help avoid outcomes such as that encountered by the roofing subcontractor in this case and should help a party better develop its claims or defenses as a matter proceeds.