Testimony on Discriminatory Sales Lead System Stands

(See dauberttracker.com for a case documents and other details)

Motion Denied

In this case, the Plaintiff Eva A. Ramirez, a Hispanic, sued Defendant Olympic Health Management Systems, Inc. for employment discrimination.  The Defendant sells life insurance policies. While she was employed at the company, she alleges that the Defendant treated her differently than non-Hispanic employees.  She also alleged that after she complained of racist behavior at the company, she was constructively discharged.

One of the Plaintiff's claims was that because of her race she was never given sales leads in spite of being one of the top sales executives. The company had a policy that award sales leads to employees with the most sales.  She also contends that the company hurt her sales potential by only giving her Hispanic leads.

To help calculate the economic damages attributed to Plaintiff's alleged lost sales leads, Plaintiff retained Dr. Lori A. Geddes, Ph.D., an economist.   Dr. Geddes used a statistical techniques to determine the number of sales leads (which would turn into sales at some point) that Ms. rameriez should have recieved if the company was acting in a race neutral manner.  Dr. Geddes performed a sales-and-lead analysis after utilizing econometric statistical analysis to calculate total lost leads.  She applied correlation and standard regression analysis to demonstrate that the majority of Plaintiff's leads were from customers with Hispanic sounding surnames. 

The Defendants filed a Daubert motion to exclude the testimony of Dr. Geddes on the grounds that she was not qualified to serve as an expert, she did base her report upon any facts and neglected to use sound methodology. It was also alleged that her testimony would not assist the trier of fact and would prejudice the Defendant's case. The Court noted that Dr. Geddes was qualified to testify as an expert in this case and that her testimony was both reliable as well as relevant to the case. 

The motion to exclude was denied.

Complaint

Plaintiff's Response to Daubert

Court Order on Daubert

Case Details:

 Ramirez vs. Olympic Health Mgmt. Sys.

Washington, Eastern District

NO. CV-07-3044-EFS

EDWARD F. SHEA, United States District Judge.

Date of Decision: 4/17/2009

Wage and hour and Daubert

Economist's testimony in FLSA case.

14. Johnson vs. Big Lots Stores, Inc.
Date of Decision: 5/7/2008
Jurisdiction: Federal
Docket Numbers: CIVIL ACTION NO: 04-3201c/w05-6627 SECTION: R(1)
Court: Louisiana, Eastern District
Area of Law: Labor & Employment
Judge(s): SARAH S. VANCE , UNITED STATES DISTRICT JUDGE.
Gatekeeping Issue: Federal Rules;Rule 702, Federal Rules;Rule 703, Federal Rules;Rule 803, Federal Cases;Daubert

Historical v. Current Interest Rates

Should an economist use the lastest interest rates or historical rates in an economic damage analysis?

Madore v. Ingram Tank Ships (732 F.2d 475 5th Cir. 1984) states "If judgment is rendered for the wage-earner, the damage award is paid at a single moment, after judgment is rendered. It can then be invested, at that moment. The market rate then available, not the average rate that would have been paid had the money been invested in the past, determines what the award will yield."

Also in footnote 2 there is the statement "While several methods of computing the discount rate are permitted by Pfeifer, supra, none contemplates using an average of rates earned in the past." And further on in footnote 2 there is the statement: "Its (Pfeifer's) discussion makes clear that the term "market interest rate" is the rate available in the market at the time the suit is tried."

Statistical evidence in wage and hour cases after Brinker

Will statistical and survey evidence become less important after Brinker?

(from Akin Gump newsletter)

The California Court of Appeal for the Fourth Appellate District on July 22, 2008, in Brinker Restaurant Corp. v. Superior Court of San Diego County, issued a unanimous, published opinion that defines the elements of meal period, rest period and off-the-clock claims under California law. The court concluded that an employer must only provide meal and rest breaks to employees, not ensure that employees take them, as lawyers for plaintiffs have argued in many cases. The court held that why an employee did not take a particular break was an individual question that could not be resolved on a class basis. The court thus reversed class certification.

In terms of statistical evidence...the Court of Appeal rejected an argument that plaintiffs raised with respect to all of their claims: that “expert statistical and survey evidence” rendered their claims amenable to class treatment. The Court of Appeal explained that such evidence, while sometimes useful in the class certification context, in this case could not show why meal and rest breaks were not taken, whythey were interrupted or why employees worked off the clock. Only individual inquiries could resolve those questions, making class certification of plaintiffs’ claims inappropriate. 

Hot tubbing Expert Witnesses

In a recent New York Times article ADAM LIPTAK's article discussed the potential problems associated with having experts that are hired by the individual parties. One interesting possibility to deal with the dueling experts is call 'hot tubbing experts'. While not nearing as fun as it sounds, in the process, (also called concurrent evidence), experts are still chosen by the parties, but they testify together at trial — discussing the case, asking each other questions, responding to inquiries from the judge and the lawyers, finding common ground and sharpening the open issues. The process has been used in Australia

Court excludes the 'horse he rode in on' but lets expert testify

Daubert Watcher 6.10.2008

In a contracts case(American Fed. Bank vs. United States, US Ct. of Fed. Claims) , the court noted that one of the experts in the case (Dr. Anjan Thakor's) report was admitted into evidence although he relied upon a document that was not allowed into evidence in the case. The expert relied on the plaintiff's (American Federal) 1993 10-K, and that document was not admitted at trial.

The court said that Dr. Thakor's expert opinion could legitimately rely on documentary materials not admitted where such materials were "of a type reasonably relied upon by experts in the particular field." Fed. R. Evid. 703. American Federal's 10-K for 1993 satisfied that criterion.

Daubert watch: Admissible police practices testimony in a personal injury case

From: dauberttracker.com


4. Bates vs. King County
Date of Decision: 5/9/2007
Jurisdiction: Federal
Docket Numbers: C05-1348RSM
Court: Washington, Western District
Judge(s): RICARDO S. MARTINEZ, UNITED STATES DISTRICT JUDGE.


Case Summary:

Plaintiff, Byron S. Bates, filed an action for damages and municipal liability against defendants King County, et. al., The plaintiff alleged that he was shot and injured at the time of his arrest by a deputy and asserted that King County failed to sensitize its police personnel on best police practices. The plaintiff proffered the testimony of Lee Libby, as an expert witness in police practices.The defendants filed a motion to exclude the testimony of Mr. Libby.

The court found that Mr. Libby had applied reliable methods to collect and analyze information related to this case and had followed proper procedures for a police practices expert.The trial court held that Mr. Libby's testimony would help the trier of fact to assess the reasonableness of the deputies' actions and the internal investigation performed by King County. The trial court observed that the probative value of Mr. Libby's testimony as to proper police officer and police department conduct was not substantially outweighed by any unfair prejudice, potential for confusion of issues, or danger of misleading the jury. Motion to exclude denied.

Can economic damages from a commercial damage calculator be used in court?

According to Determining Economic Damages by Gerald Martin, probably not. See:


UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT
47 F.3d 292; 1995 U.S. App. LEXIS 2321; 41 Fed. R. Evid. Serv. (Callaghan) 351
December 16, 1994, Submitted : February 9, 1995, Filed

Appellee was a seaman who served as a Second Mate aboard the S/S Pomerol, an oil tanker owned and operated by the appellant. She filed the underlying action under the Jones Act, 46 U.S.C. §668, and general admiralty and maritime law to recover damages for injuries sustained in separate incidents aboard the ship. During the course of a six-day jury trial, appellee offered into evidence a “Future Damage Calculator” marketed and distributed by the “Lawyers and Judges Publishing Co.”

This exhibit is a slide rule-type device which has life expectancy and work life expectancy tables on [**2] one side, and a “present value” table on the other. See addendum. The exhibit was offered without being identified or sponsored by any witness.

The [**4] issues on appeal are whether it was error for the district court to admit the Future Damage Calculator into evidence, and if so, whether the error was prejudicial to the appellant requiring reversal. The abuse of discretion standard governs our review of a district court’s decision regarding the admissibility of evidence.

The record reveals no foundation being laid for the exhibit itself or its method of calculation. No evidence was presented as to what would constitute a “fair rate of interest.” In short the jury was given this tool to do with as they would. The appellant was not given an opportunity to challenge the author’s expertise or methods of calculation. The exhibit is all the more troubling because [*296] the name of the publisher, “Lawyers and Judges Publishing Co.,” suggests that the judiciary has vouched for it. The submission of this exhibit into evidence as something resembling expert testimony without foundation, qualification or instruction was an abuse of discretion.

For the reasons stated herein, we reverse the district court and remand this case for a new trial on the issue of damages.

Calculating damages in FLSA and wage and hour cases

Singer et. al v. City of Waco, Texas

Moral of the story: Audit your data, use the correct number of work period hours in regular rate calculations, and consider offsets

In this case the Court considers the issue of damages in wage and hour case involving the Waco fire department. In the case, the jury found that the City willfully acted (and in bad faith) when it failed to pay the Plaintiffs overtime due under FLSA.

Following the liability portion of the case, the 180 plaintiff WFD employees entered the damages phase of the trial. In the damages phrase both sides engaged economic damage experts to calculate the value of the unpaid overtime.

Although the The court awarded the plaintiff's a significant amount that including liquidated damages, the award was significantly less than the plaintiffs' expert opined. Specifically, the Court stated that:

• The summaries prepared by the defendant were more credible because they were double checked and audited.
• The Court was also clear (and provided very detailed damage tables) to make sure that the correct number of hours in a pay period were used (as required under FLSA for the calculation of the regular rate).
• To avoid unjust enrichment, The City should be able to count OT overpayments as an offset to the FLSA underpayments.
• In this case the offset was calculated as by, first determining the underpayments due under FLSA, assessing the liquidated damage requirement of FLSA, and then adding the amount underpayments due to the Texas Local Government Code. Only then should the overpayments made by the City during the four years prior to filing the lawsuit be offset against the total damages amount.

Bottom line: Good case to review when calculating damages in wage and hour cases


damage_calc_waco.pdf

Court allows statistical survey evidence

(thanks Dauberttracker.com!)

In Merisant Co. vs. McNeil Nutritionals, LLC ( 4/12/2007), CIVIL ACTION NO. 04-5504, Pennsylvania, Eastern District (GENE E.K. PRATTER, United States District Judge.)

Case Summary:

Plaintiff, Merisant Company, Inc., filed a case against defendant McNeil Nutritionals, LLC, and McNeil PPC, Inc. under the Pennsylvania common law of unfair competition. The plaintiff alleged that defendant had engaged in false and misleading advertising with respect to Splenda No Calorie Sweetener.

The defendant proffered the statistical survey evidence. The plaintiff sought to exclude the survey and all related testimony and opinion.

The plaintiff argued that the defendant's survey did not meet the "fit" and "reliability" elements required by Daubert. The plaintiff further argued that the defendant's survey was neither relevant nor reliable with respect to the issues of this case. While expressing some reservations, the court nonetheless denied the motions to exclude.

This is an interesting case because the court goes into much detail and provides detailed analysis about what is required for a survey to be admissible. The court states:

In order for a survey to be admitted, its design must "fit" the issues to be decided in this case. In J&J Snack Foods Corp. v. Earthgrains Co., 220 F. Supp. 2d 358, 370 (D.N.J. 2002), the court state that: Above all, the survey's design must fit the issue which is to be decided by the jury, and not some inaccurate restatement of the issue, lest the survey findings inject confusion or inappropriate definitions into evidence, confounding rather than assisting the jury. Only if the expert testimony and related survey are useful, reliable, and have probative value after all their deficiencies are taken into account is the evidence admissible. Id. In addition, the court noted that it was "essential to consider whether the population and terms were properly defined, whether the design, questionnaires, and interviews met objective standards, whether data was accurately collected and reported, whether data was properly analyzed, whether the questions asked were unrelated to the material issues of the case, whether questions were unfairly leading, and whether questions were confusing." Id. at 369. J&J Snack Foods addressed a dispute arising in the trademark context, where a survey was submitted to show the trademark should be classified as "suggestive" instead of "generic" or "descriptive." However, the survey did not properly define any of the classifications, and, consequently, the court found that the survey had "no bearing on the issue it was submitted for." Id. at 370. The court noted that "the flawed definition permeated the entire survey to make its finding completely untrustworthy and unreliable." Id. at 370-71.

Daubert challenges reach new level in Texas

Excerpted from the Austin American Statesman, December 22, 2007 article by Corrie MacLaggan.

In a lawsuit challenging the legality of a $5 tax on strip clubs in Texas, State District Judge Scott Jenkins had to rule on a Daubert/Robinson motion to exclude the expert witness testimony of University of Texas professor Robert Jensen. Prof. Jenson is an associate professor in the school of Journalism and a leading researcher on pornography. In this case, Prof. Jensen testified on behalf of the state.

As in expert witness challenge, the opposing attorney, went into much detail on how Prof. Jensen's work on was directly related to strip clubs. Prof. Jensen testified he had not done specific work on the industry, but testified that his work was generally related to the issues in the case.

The court allowed Prof. Jensen to testify. For more details on the case, see the Austin American Statesman. FYI, the court also upheld the tax.

Mississippi Supreme Court rules that expert evidence deserves its day in court

In Smith v. Clement, No. 2006-CA-00018-SCT (Miss. 10/04/07)., THe Supreme Court of Mississippi ruled that courts must provide litigants with an opportunity to be heard before ruling on the admissibility of expert testimony – and in all but exceptional cases that requires courts to hold hearings with full briefing and argument.

This important ruling may make some attorneys think twice before expending the resources on a Daubert challenge.

In a nutshell, the court said that litigants should have an opportunity to be heard on the admissibility of expert testimony.

Hearings make sense, the court said, as the most cautious approach to complex evidentiary issues."Perhaps before Daubert, such a determination could be made without a hearing, but the continual evolution of science and the growing intricacies of litigation mandate that we take the trial court’s role as 'gatekeeper' seriously," the court explained. "A hearing is simply the best method of guarding the admission of expert testimony."

See IMS for more.

Economist Daubert Watch: Sept. 24, 2007, Part I

Objection to defendant's statistical report is not enough to kick report and defeat summary judgement

(see dauberttracker.com for more details)

In Contreras vs. Chertoff, U.S. District Court, D.C., this class action discrimination case was before the district court on defendant's renewed motion for summary judgment. The plaintiffs sought to represent a class of current and former Customs Service agents alleging discrimination on the basis of national origin in violation of Title VII of the Civil Rights Act of 1964.

Defendant submitted an extensive expert analysis of the discipline files to address the question of whether or not Hispanic customs agents received harsher disciplinary treatment than similarly situated white customs agents. The defendant's concluded that because no disciplined Hispanic and white customs agents were similarly situated, a proper statistical comparison was impossible. Furthermore, even using alternative statistical analysis, there was no evidence indicating discrimination against Hispanic agents in the disciplinary context.

Plaintiffs apparently discovered nothing among these thousands of documents worth presenting to the court to substantiate their claims of discrimination. Instead, their opposition to the renewed motion for summary judgment only complained again that defendant's analysis was inadequate. The plaintiffs' challenged the reliability of the databases relied upon by defendant's expert and the expert's methodology in analyzing the data.

Plaintiffs did not present statistical evidence supporting their claims of discrimination. Instead, they offered studies of Customs employment practices, anecdotal evidence from the named plaintiffs, an expert disputing the defendant's analysis, and the testimony of an expert in management and equal opportunity practices.

Plaintiffs' responses to defendant's motions for summary judgment were insufficient to defeat defendant's renewed motion.

Upcomming Daubert seminar

Daubert Motions: Challenging Expert Opinions
Live Teleconference - $199

September 11th, 2007 - 1:00 PM - 2:30 PM Eastern

Teleconference Highlights:
Since the U.S. Supreme Court decided Daubert v. Merrell Dow Pharmaceuticals in 1993, the federal law governing expert testimony has undergone a radical transformation. The courts of most states have also now adopted Daubert to some extent. Every litigator needs to understand the impact of Daubert and its progeny. Used properly, Daubert can be a powerful tool for excluding expert evidence. This teleconference will give you the ammunition you need to challenge opposing expert testimony. Basic concepts of the law governing admissibility of expert testimony, and will offer practical and concrete advice on how to bring and defend expert witness challenges under Daubert will also be discussed. We will explore the strategic question of when a challenge to expert testimony should be considered, as well as the tactical issue of how to prepare a case for such a challenge.

View Complete Agenda
Who Should Attend:Attorneys and legal staff
Faculty:G. Brian S. Jackson, Miller & Martin PLLC

Detailed Faculty Information

Register online at: Lorman

Economist Daubert Watch: Passing thru the gate

(Experts from Dauberttracker.com)

Case 1: Sharp Corp. vs. Au Optronics Corp.

Court says: Criticism by attorneys not enough for Daubert; plaintiff's economic expert can testify because defendant's failed to introduce opposing economic expert report;

See:
Sharp Corp. vs. Au Optronics Corp.
Date of Decision: 6/20/2005
Jurisdiction: Federal
Docket Numbers: C-03-4244 MMC
Court: California, Northern District
Area of Law: Corporate Law


Case 2: Reginald Martin Agency, Inc. vs. Conseco Med. Ins. Co.

Court says: Relying on the work of other experts does not make defendant's expert report inadmissible

Reginald Martin Agency, Inc. vs. Conseco Med. Ins. Co.
Date of Decision: 3/5/2007
Jurisdiction: Federal
Docket Numbers: 1:04-cv-01587-TAB-RLY
Court: Indiana, Southern District
Area of Law: Insurance Law

Court allows economist to testify in high profile immigation case

In Lozano vs. City of Hazleton, the city ordinance that fined Hazelton employers and landlords for doing business with undocumented or unauthorized workers was challenged by a number of groups, including the ACLU. The groups alleged, among other things, that the ordinances were unconstitutional. (see complaint)

The City of Hazleton, called a well known labor economist Prof. George Borjas to discuss the potential economic impact of City's ordinance. The economist concluded that the reduction unauthorized workers in the City would produce 'significant economic benefits' for the authorized workers in Hazelton. (see report)

The plaintiffs attacked the report on the grounds that its filing was untimely and not relevant to the main issues in the case. (see motion)

The court allowed the economist to testify.

motiontoexclude1.pdf
borjas1.pdf
motion1.pdf

Daubert watch: S.F. BART's investigative cost

Economist allowed to testify on government agency's cost of investigating wrong doing by San Francisco, BART contractor.

San Francisco Bay Area Rapid Transit District, vs. William D. Spencer, F. W. Spencer & Son, Inc., et. al. (2007 U.S. Dist. LEXIS 10730; 2007 U.S. Dist. LEXIS 10730)

See dauberttracker.com (search above) for more information.

Who pays the expert for Daubert hearings?

Not the opposing party says the Fifth Circuit....

From BullsEye Newsletter: JUNE 2007, Robert Ambrogi, Editor

A federal discovery rule requiring an opposing party to pay expert-related fees and expenses does not apply to pretrial Daubert hearings, the 5th U.S. Circuit Court of Appeals has ruled. "A Daubert hearing is not a discovery proceeding but an evidentiary hearing designed to screen expert testimony," the court reasoned.

The ruling came in a toxic tort case in which the 5th Circuit also upheld the trial court's exclusion of expert testimony linking the toxic chemical benzene to plaintiffs' cancers. The court said, although Fed. R. Civ. P. 26(b)(4)(C) allows a party to recover discovery costs relating to expert witnesses, the rule does not extend to the $64,000 in expenses these plaintiffs incurred in securing their expert's testimony at the Daubert hearing.

This something for all parties to be aware of....

Court limits economic expert's testimony on worklife expectancy

In Arreola vs. Epic Divers, Inc., Louisiana, Eastern District, Judge Jay C. Zainey granted the courts motion in limine to exclude part of a defense expert's economic damage report on lost earnings in workers compensation case.

Plaintiff's complaint concerning the defense expert's report was limited solely to his assertion that plaintiff's worklife expectancy (the potential loss period) as a commercial diver was properly fixed at 5 years from the date of his accident. The defense expert had derived the 5 year estimate from a case study compiled by Louisiana State University's Department of Quantitative Business Analysis. Plaintiff argued that the LSU study did not satisfy the requirements of Daubert because no other court had ever ruled upon its admissibility, and because it had never been published or subject to peer review.

The court held that the expert would not be allowed to testify regarding any type of reduced worklife expectancy for divers because that was not his area of expertise. In addition any testimony regarding the LSU study was specifically excluded because the Court was not convinced that it was reliable.

For more details and discussion on the case see dauberttracker.com

When attorneys become expert witnesses

Attorneys in the Wal-Mart break-time class action appeared in a Philadelphia Common Pleas courtroom Tuesday to debate the plaintiffs' request for counsel fees totaling more than $46 million. Among the fees-related expert witnesses called to the stand by the retail giant during the hearing was Ralph Wellington, chairman of Schnader Harrison Segal & Lewis. Wellington who oversees his firm's billing structure, was Wal-Mart's expert on the reasonableness of class counsel's rates.

Read the entire article here: http://www.law.com/jsp/law/LawArticleFriendly.jsp?id=1172656993341

Daubert watch: Court slams door on professor's statistical testimony

In Lucresia Mayorga Santamaria vs. Dallas Indep. Sch. Dist. ( Decided: 11/16/2006) in Federal Court in the Northen District of Texas Judge Lindsay determined that the testimony of a statistical expert would not aid or assist it in deciding whether there had been a violation of the Fourteenth Amendment or of Title VI.


This lawsuit concerned allegations of unlawful segregation of Latino school children at Preston Hollow Elementary School. Preston Hollow is an elementary school in a predominantly Anglo neighborhood in Dallas, Texas. In support of their claims, Plaintiffs offered testimony of a well known and qualified university education professor.

After conducting a mathematical analysis of the data, the stats expert concluded that the pervasive and robust within-school segregation was based on race/ethnicity. The district court determined that the professor's testimony and statistical analysis were fraught with flaws. However because the court did not feel that the professor's report would assist the court in this case, even if it were not fraught with flaws, it did not actually rule on the admissibility of the report under Fed. R. Evid. 701.

For more go to: dauberttracker.com

Attorney: Tennessee courts finally joins the Union

According to the blog, John Day on Torts, the local rules concerning expert witness testimony in Middle Tennessee Federal Court may be a changing and coming in line with other Federal courts.

John Day says: "The Federal Court for the Middle District of Tennesse has a local rule on expert witness that has been criticized for decades. " The local rules in the state essentially require everything to to be written out - including definitions of words, etc. - and then require the expert to read from the report which does little more than bore a jury to death

According to Day on Torts blog: "The Sixth Circuit Court of Appeals has reversed a judgment because the Court enforced the rule. In Thompson v. Doane Pet Care Co., No. 05-5377 (Dec. 15, 2006) the Court said that the [Tennesse] local rule was inconsistent with the Federal Rules of Civil Procedure, including Rule 89(a)(2), which provides that "[a] local rule imposing a requirement of form shall not be enforced in a manner that causes a party to lose rights because of a nonwillful failure to comply with the requirement."

For the full post, click here.

An attack on 'speculative' earnings capacity analysis of young child

In this Tennessee wrongful death case, Defendants moved to exclude the expert witness testimony of an economist who was to testify regarding the present value of a three year old child's loss of earning capacity.

The defense argued that the Plaintiff's economist did not have a sufficient basis on for his assumptions concerning the future educational attainment of the deceased child.

The Defendants also moved to exclude the plaintiff's economist testimony because he did not include a deduction for personal maintenance expenses. The Defendants' believe that the Tennessee Supreme Court under, Wallace v. Couch, required the deduction.

The plaintiff's response to the defendant's motion can be found here. An interesting read.

Judges see the power of blawgs

According to a National Law Journal article by Pamela A. MacLean, more and more Judges aer citing blawgs in their rulings...


In fact the article finds that blawgs have been cited at least 32 times in 27 different decisions over the last two years.

Perhaps the most noted was by Justice John Paul Stevens in his dissent in an important sentencing decision, U.S. v. Booker, 543 U.S. 220 (2005).

More recently, on July 31, a 9th U.S. Circuit Court of Appeals dissent by Judge Diarmuid O'Scannlain cited commentary on law Professor Eugene Volokh's blog, "The Volokh Conspiracy," in Harper v. Poway Unified School Dist., 2006 U.S. App. Lexis 19164.

Experts relying on other witnesses' deposition testimony

Can an expert use deposition testimony evidence that would otherwise be inadmissible? Court says yes.

In U.S Information Sys. vs. IBEW Local Union No. 3, AFL-CIO, court allows anti-trust expert to "quote summaries of depositions, even those containing hearsay, to convey his view of the economic background in which the events in this case took place and his expert opinion on whether such economic conditions tend to show market dominance"

The defendants in the case argued "that '[t]here was no economics or science to [the anti-trust expert witness]'s analysis: he simply read parts of the record then reached a verdict." The court found otherwise. and said the expert "applied his expertise to the facts contained in those depositions and drew conclusions from them"

Daubert ruling kills plaintiffs case

As reported in IMS Bullseye newsletter, a federal court ruling excluding all expert testimony that the drug-preservative thimerosal caused a minor child's autism is likely to have repercussions well beyond the case in which it came. The judge, Winston-Salem, N.C., U.S. District Judge James A. Beaty Jr, issued the dismissal after he granted a defense motion to exclude all expert testimony drawing a link between thimerosal and autism.

The ruling comes as nearly 5,000 claims await disposition in an omnibus proceeding pending before the U.S. Court of Federal Claims under the National Vaccine Injury Compensation Program.

The decision to exclude all expert testimony came after a three-day Daubert hearing. (yikes!) The hearing focused on the testimony of Dr. Mark Geier, the leading proponent of the thimerosal-autism link and an expert witness in many of the vaccine cases. The court noted that the bulk of Dr. Geier's testimony was "not based upon his own research, but instead upon a review of the relevant literature." But the literature he relied on, the court went on to conclude, "does not add up to the opinion and conclusion that Dr. Geier is offering."

The opinion is available on the court's Web site at: www.ncmd.uscourts.gov/Opinions/Jul06/03cv669op.pdf.

New call for hedonic damages? Emotional distress damages can not be taxed

From the THE ASSOCIATED PRESS
Tax code on emotional damages tossed

WASHINGTON -- The federal government may not tax the money plaintiffs receive as compensation for emotional distress and other intangible injuries, a federal appeals court said Tuesday.... it could mean the end of tax bills following a variety of trials, from civil rights disputes to employment discrimination cases.

The court ruled that such awards, like the$70,000 judgment for emotional distress and injury to reputation following a 1994 whistleblower case against the New York Air National Guard that lead to the decision, were not income but "compensation for the loss of a personal attribute." In that sense, they are akin to awards for physical injuries, which are tax exempt, the court said.

Should Forensic economists experts do independent background checks?

In lost profits cases and business interuption cases, it is routine for the economist to perform a thorough search into the background of the business. Economists in these cases at a minumum will search thru pages and pages of websites to look at the nature of the business, public news, and search public records.

In injury, death, and employment cases, unless the information is brought to the attention of the expert, this type of search is not done for the target of the lost earnings analysis.

However, should this be done?

More an more information about a person's background, such as criminal history, is easily accessible on the web. For instance, in a post at Gritsforbreakfast, Texas Jail Inmate Locators Online, he found a website that list arrest record sources for all 50 states ( this page ) on ancestorhunt.com, a genealogy site. Other information, like it or not, is fairly easy to obtain.

Qualifications matter...

...especially when calculating future earnings losses in personal injury cases:

From McCabe vs. Ransom (Ohio state court)

This personal injury action arose out of an admitted liability automobile accident when a car being driven by Terry McCabe was rear-ended by a car driven by Matthew Ransom.

To prove a future wage loss, McCabe, as is common in personal injury cases, attempted to elicit testimony concerning future wage losses. However, in this case, instead of retaining an economist, the plaintiff relied on testimony from the business manager and financial secretary of the local workers union of which McCabe was a member.

The trial court rejected the business manager's testimony and did not allow him to testify at trial. The court noted that the business manager was not an economist and his sole qualification on the record was that he had a college degree in labor studies.

Given the relative weakness of the business manager's qualifications to testify in the unquestionably speculative area of predicting future business prospects, the appellate court found that the trial court did not abuse its discretion in limiting his testimony. The witness failed to meet the requirements of rule 702.

Punchline: The appeals court found that the trial court did not err in rejecting the business manager's testimony.

US Supreme Court stresses "context" in upholding Title VII discrimination case

The US Supreme Court entered a decision today in the matter of Burlington Northern & Santa Fe Railway Co. v. White, a Title VII case regarding its anti-retaliation provisions. Justice Breyer delivered the opinion of the Court:
“Title VII of the Civil Rights Act of 1964 forbids employment discrimination against "any individual" based on that individual's "race, color, religion, sex, or national origin." … A separate section of the Act--its anti-retaliation provision--forbids an employer from "discriminat[ing] against" an employee or job applicant because that individual "opposed any practice" made unlawful by Title VII or "made a charge, testified, assisted, or participated in" a Title VII proceeding or investigation…
We conclude that the anti-retaliation provision does not confine the actions and harms it forbids to those that are related to employment or occur at the workplace. We also conclude that the provision covers those (and only those) employer actions that would have been materially adverse to a reasonable employee or job applicant. In the present context that means that the employer's actions must be harmful to the point that they could well dissuade a reasonable worker from making or supporting a charge of discrimination.”

The Supreme Court upheld a lower court’s award of $43,000 to Ms. White for her troubles (37 day suspension without pay during the Christmas season, et al) after issuing a series of complaints in a non-constructive work environment. That last sentence of the above opinion is very telling, in that the Court unanimously (9-0) establishes the importance of “context” in establishing which employer actions (i.e., those which are “materially adverse to a reasonable employee”) would be deemed harmful, such that they would convince a reasonable worker from making a charge of discrimination.

One of our own in the news...

It is rare that economists other than the authors of Freakonomics get in the spotlight; but Allan McCausland, an economist unaffliated with lostcompensation.com is a long time and active member in the forensic economics community, was mentioned in the Boston Globe for his testimony in a high profile wrongful death case.

Congratulations Dr. McCausland!

Excerpt:

Testimony puts lost income of slain fisherman at $1.8m
By Shelley Murphy, Globe Staff June 10, 2006

What is one man's life worth? It was a question that came down to money yesterday as an economist testified that Quincy fisherman John McIntyre probably would have earned $1,868,820 over his lifetime, if he hadn't been slain in 1984 by gangsters Stephen ``The Rifleman" Flemmi and, allegedly, James ``Whitey" Bulger.

New Hampshire economist Allan Stuart McCausland testified in US District Court in Boston in a $50 million wrongful death suit that McIntyre's mother, Emily, and brother, Christopher, have filed against the government, seeking money for their economic loss and for punitive damages based on alleged negligence......

Dispute on lost profits go to weight...

From Blog702....

The Eighth Circuit has upheld the trial court's decision admitting CPA testimony on lost profits in a commercial dispute involving breach of a distributorship agreement.

The defense attorneys for distributor objected that the CPA's expert analysis rested on undemonstrated factual assumptions. The appellate panel dismissed that argument, restating the Eighth Circuit's general rule that the factual bases of an expert's opinion usually go to weight, not admissibility.

That rule was all the more applicable, said the panel, given that the CPA's need to make factual assumptions arose largely from the distributor's breach. See Matthew Headley Holdings, LLC v. McCleary, Inc., No. 05-2122 (8th Cir. May 19, 2006) (Colloton, Heaney, & Gruender, JJ.).

Economic Expert Testimony on Lost Wages OK'd in Fatal Accident Case

As reported by Shannon P. Duffy, The Legal Intelligencer, 05-10-2006

'When calculating the lost wages of a college student who died in a rollover accident -- and whose parents say he planned to become a lawyer -- a federal judge, U.S. District Judge Gene E.K. Pratter, has ruled that an economic expert witness may be allowed to testify that one possible calculation of his lost wages would be premised on a lifelong career as a practicing lawyer -- possibly up to the age of 89.'

Click here for the opinion

Two interesting things about this case:

* Judge allowed the economist to present a high end loss scenario that had the deceased becoming an attorney even though the deceased was only in undergraduate school at the time of his death.

* The judge recognized and saw through attempts by the defense to miss- characterize the plaintiff's economics expert's methodology.

Overall this is an exciting decision because it gives economists and attorneys who have to develop economic damage scenarios for individuals with little or no labor market history something to stand-on...at least in PA!
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From, Shannon P. Duffy, The Legal Intelligencer, 05-10-2006

Specifically, the defense team insisted that the plaintiff's experts calculations were unrealistic because he improperly assumed that Montgomery would continue working until age 89 and therefore have a 66-year career as a practicing lawyer.

But Pratter found that the defense had mischaracterized Gamboa's calculations because they were expressed in ranges premised on numerous "worklife expectancy" probabilities, including that there was only a 1.4 percent chance that he would work to age 89.

Pratter concluded that the "work-life expectancy table" Gamboa had constructed "really represents a statistical exercise constructed to estimate economic loss, and is not expected to reflect actuality."

Although the defense may at trial challenge the "weight and credibility" of the data Gamboa used, Pratter refused to exclude it, saying the evidence "does not suggest that the work-life expectancy table was created based on unreliable assumptions."


The plaintiff's economic expert also produced a multi-scenerio economic damage report. The lowest figure on the chart is slightly more than $589,000 and is premised on the assumption that Montgomery would end his education with a bachelor's degree and would never marry.

But the chart also includes estimates for an extended education, including law school, as well as three additional possible fates for his family -- married without children, with one child, and with two children.

The highest figure on the chart is more than $5 million, premised on the possibility that he would have become a lawyer and father of two.

Criticizing the chart, the defense team argued that "each of these calculations is laden with unsupported speculation." But the Montgomery family's lawyers -- argued that the plaintiff's economic expert had properly based his calculations on "traditional and reasonable factual assumptions taking into account decedent's station in life, as well as [his] family background, the demographics of the Montgomery family and appropriate economic factors traditionally employed in studying and calculating a person's loss of earnings capacity."

The evidence, they said, will show that Montgomery was a junior at Penn State University who was earning good grades and who had expressed his long-term plans of attending graduate school, law school, marrying, and having a family.

The defense team argued that a trio of decisions from the 3rd U.S. Circuit Court of Appeals dating back to 1983 supported their argument that Gamboa's conclusions were unfairly speculative. But Pratter found that none of the 3rd Circuit decisions was particularly helpful.

In one, Pratter said, the 3rd Circuit "focused on the methodology applied by the vocational rehabilitation expert, and not entirely on the data or assumptions relied upon."

In the second, she said, "the focus was really on the qualifications of a certified public accountant to conduct a vocational assessment and estimate an economic loss, and not the reliability of the data used, as is the question here."

And in the third, Pratter said, the appellate court found fault in the data used by the expert because it included "the plaintiff's entire life span as opposed to his work--life expectancy" and because the data inflated the plaintiff's actual income and added fringe benefits that the plaintiff had never received.

Instead, Pratter found that the case most directly on point was the Pennsylvania Superior Court's 1987 decision in Mecca v. Lucasik which held that "estimating the future wage loss of a youth is not inappropriate."

In Mecca, an economic expert was called upon to predict the future earnings of five teenagers who had been killed.

The Superior Court concluded that the assumptions regarding the teenagers' incomes was reasonable because they were based on testimony that amounted to "more than the dreams of each teenager as supported by his or her parents at trial."

Pratter noted that the Mecca court "found acceptable that the expert had looked to not only the desires of the teenagers that had been conveyed through the testimony of their parents, but also to testimony with respect to the teenagers' grades, the performance of siblings, and the educational and vocational backgrounds of their parents."

Do forensic economists calculate pre-judgment interest in Tennessee?

Generally the court, and not economists, calculates pre-judgment interest in Tennessee. In other words, it is a lawyer issue and not an economist issue. Economists practicing in the area report that pre-judgment interest is allowed in employment cases but there is uncertainty regarding PI and WD cases.

The pertinent statute is TENN. CODE ANN. § 47-14-123:

“Prejudgment interest, i.e., interest as an element of, or in the nature of, damages, as permitted by the statutory and common laws of the state as of April 1st 1979, may be awarded by courts or juries in accordance with the principles of equity at any rate not in excess of a maximum effective rate of ten percent (10%) per annum.”

Another application of the collateral source rule

Collateral Source Rule Applies to Lawyers
By John Day on Damages

A lawyer was hurt in a wreck and received injuries that limited his work hours. He was a partner is a law firm and continued to receive his regular compensation despite his failure to work and bill the required number of hours. The judge did not permit the defendant to tell the jury that the lawyer received his normal compensation. The jury awarded money for lost of income and defendant appealed.

The California Court of Appeal affirmed, stating "[h]owever criticized, maligned or debatable the application of the collateral source rule may be in this case, it is not within our province to depart from established California law and we decline to do so." The case includes a nice discussion of the public policy supporting the rule.

The case is Smock v. State of California, (A107532, A108413 Cal. Ct. App. 1st Dis., Div. 3 4/18/06). You can read it here

Unpublished court decisions, expert witnesses, and the future of Daubert

As many already know, the Supreme Court has approved amendments to the Federal Rules of Appellate Procedure that will permit citation of unpublished opinions beginning in 2007. (also see law.com)

According to Blog 702, while there may be fields of legal practice where the change will make little difference there will be areas of expert evidence, where the changes will be noticeable. Economic and related evidence is an area that is esp. likely to be effected.

Blog 702 states that about 40% of all federal appellate opinions addressing the admissibility of expert evidence are currently unpublished. Blog 702 authors believe that after the rules change, there will be a substantial expansion of the body of decisions to search for precedents involving the same expert, or the same field of expertise, or the same issue, or even similar fact patterns.

As the body of (published and unpublished) citable decisions expands, so too does the likelihood of finding decisions on point. All else equal, it would seem, the more guidance on how the court views a given field of expertise the better the situation for experts and attorneys.

How not to do a 'failure to mitgate' study in an ADA case

Statistics and the ADA - 'Is the glass half empty or half full?'

(From Jottings by an employment lawyer)

In a nutshell, the plaintiff's statistical vocational study was used against them! The voc expert estimated that the person because of their injury was not able to work in 57% of the jobs that the person was qualified.

The court, instead of concluding that this was evidence of a disability, found that this meant that the injured plaintiff could work in 43% of jobs that were out there. This to the court showed that the person could in fact work.

Note: One thing that the plaintiff's consultant missed that was huge, was there was not a labor market study done by a economist to determine the supply and demand for the jobs that the injured person was able to work. There may have been relatively few job demand for the jobs that the person could do. In this case the labor market impairment may have been more apparent.

From: Jottings....

... the 4th Circuit holds an employee who needed to lift 75 pounds to do his job, and had a 30 pound lifting restriction following a back injury, was not disabled as that term is defined in the Americans with Disabilities Act. The plaintiff had tried using a statistical finding by a vocational counselor to show he had a substantial impairment in the major life of activity of working:

The vocational consultant estimated that Taylor’s work experience and educational background qualified him for 3,281 job titles out of the 12,741 job titles listed in the Department of Labor’s Dictionary of Occupational Titles. According to the consultant, Taylor’s injury excluded him from 1,871 job titles, or 57 percent of the job titles for which he would have been qualified absent his injury. These figures translate into disqualification from 370,000 jobs in the Baltimore-Washington metropolitan area. Despite his impairment, Taylor remained able to perform the work involved in 1,410 job titles, or over 130,000 jobs in the region.

The Court assumed without deciding that working is a major life activity, but found the district court's grant of summary judgment for the employer in light of these statistics plus evidence that the plaintiff could engage in a "range of daily activities requiring endurance, flexibility, and some strength" was not wrong. Taylor v. Federal Express Corp. (4th Cir. 11/16/05) [pdf].

Responding specifically to the argument that the district court had not given appropriate deference to the consultant's finding, the Court instead held:

Taylor admittedly retains the ability to engage in a wide range of daily activity and to work in over 100,000 jobs in his geographic region, a reasonable juror could not find that his impairment substantially limits his ability to work.

Chicago Injury Blawg post on Vioxx

Chicago injury blawg, http://www.chicagoinjurylawblog.com/vioxx-98-vioxx-verdict-is-justice-not-a-jackpot.html, has an interesting post on the punitive (or lack of punitive) effect of the Vioxx decision on Merck. In this post, William Pintas, a injury attorney, reports that the the Vioxx award is far from a jackpot award. He states that due to tort reform in Texas, the award will be reduced to around $1.6 million. He says that this amount is equal to about a $30 fine for the average household.

However, the direct effect of the award of $1.6 million on Merck is even LESS than a $30 ticket on an average household!

As economists we are asked to do these types of punitive damage analyses all the time. Based on Merck’s 2004 earnings of about $17 billion a year, the $1.6 million fine on Merck is equal to about a fine of about $3.17 for a household earning $35,000 a year. So all else equal, the punitive effect is even less.