Filed under: Law.com

Lost Profits Award for Breach of a License Agreement Cannot Rely on Comparison Between Recent Entrant and Market Behemoth

Originally published in the New York Law Journal, an ALM Media publication, on November 13, 2017.

By: Richard Raysman and Peter Brown

It is black-letter law that liability for breach of contract does not mean that the prevailing party is entitled to its requested damages award, much less any damages at all. In particular, New York law applies a higher standard relative to other damage categories when evaluating a prevailing party’s claim based on lost profits. To avoid losing on a damages request, or receiving only a nominal award, the prevailing party must show that lost profit damages can be proven with “reasonable certainty” and “were fairly within the contemplation of the parties to the contract at the time it was made.”

Past sales often furnish a persuasive rationale for estimating lost profits. Obviously this is largely inapplicable to start ups and other nascent enterprises, particularly when these entities have not executed agreements that specifically contemplate the dollar amount of compensation, and rely instead on equity offerings or percentages of prospective sales. An early stage trademark licensor encountered this problem when litigating the breach of a license by the licensee in 2005, when the licensee had been in business for only a handful of years. This column discusses the most recent opinions in the matter, which illustrate the difficulties in obtaining a lost profits award when premised on conjectural comparisons between the prevailing party and an established, if not leading presence in the relevant market.

 

Facts and Procedural Background

Plaintiffs Daryl Washington and Sunday Players, Inc. owned seven licensed marks for a “Sunday Players” brand utilized in selling “compression” apparel. Defendant Kellwood Company manufactures, advertises and distributes various types of apparel. In 2002, the parties discussed an arrangement wherein defendants would manufacture compression products bearing the “Sunday Players” marks. This proposed business arrangement soon progressed into a potential joint venture after Kellwood allegedly facilitated meetings with major players in the retail apparel market, in which such retailers “express considerable interest in selling products displaying [plaintiffs’] marks.”

Consequently, on Nov. 25, 2003, the parties entered into a license agreement (the “license”). The initial term of the license expired on Jan. 31, 2007. The license granted defendant an exclusive license to use the “Sunday Players” mark in conjunction with the “production, manufacture, advertising, merchandising, promotion, importation, distribution and sale” of various classes of apparel and accessories. The license obligated defendant to spend three percent of gross sales on marketing these products. Plaintiffs’ alleged that defendants, through subsequent “various oral and written agreements,” undertook additional obligations, including to spend additional funds on marketing products using the Sunday Players name.

According to the plaintiffs, the defendant failed to uphold its side of the bargain to use best efforts to generate profits under the license. Defendant countered by alleging that it in fact did dedicate its best efforts to selling products with the Sunday Players mark, but nonetheless could not make a single sale of such a product. Defendant claimed to have spent more than $220,000 in marketing the Sunday Players’ products, including pitches to “approximately eighteen large retailers.” Dissatisfied with the performance of the Sunday Players products, in or around April 2005, defendant terminated its arrangement with plaintiffs’, including the license.

That decision triggered the instant litigation, which has now been active for nearly 12 years. Plaintiffs alleged, inter alia, that defendant failed to give its best efforts to market and sell the Sunday Players products and breached the license by unilaterally terminating it prior to expiration. After considerable procedural wrangling and discovery, on summary judgment, the District Court held that defendant breached the license due to an unlawful premature termination and the failure to provide product samples to plaintiffs.

Trial was held to determine if defendant also breached the license in a third way: by failing to undertake reasonable marketing efforts prior to termination. On Feb. 11, 2016, a jury returned a verdict in the affirmative, awarding plaintiffs, in relevant part, $4,350,000 in lost profits. The jury heard the testimony of plaintiffs’ expert witness, which concluded that if reasonable marketing efforts had been made, “Sunday Players would have sold [products] at 50 percent [of a primary competitor] at a comparable stage of development.”

 

Legal Analyses and Conclusion

In September 2016, the parties cross-moved for various reasons, including defendant’s motion for a judgment as a matter of law alleging that plaintiffs’ provided no foundation for certain assumptions of plaintiff’s expert concerning the lost profits and loss value estimates. See Washington v. Kellwood Co., 2016 WL 3920348 (S.D.N.Y. July 15, 2016).

The District Court agreed. While finding for plaintiffs on liability grounds, the court held that plaintiffs lost business value broadly speaking as a result of the license breach, but did not prove that “its new and untested business would have achieved vast market success but for Kellwood’s breaches,” which was the foundation for the $4,350,000 verdict. Accordingly, since the jury’s lost value verdict relied on speculative evidence projections rooted in the future success of plaintiffs’ business (then in its nascent stages), the court vacated the verdict with respect to damages and remanded for a new trial to establish any “lost business value damages.”

Specifically, the District Court held that the lost profits award was based on insufficient evidence. First, the award did not have a foundation, i.e., Sunday Players’ lack of “track record” in the market, to prove with reasonable certainty the existence of lost profits. See Kenford Co., Inc. v. Cnty. of Erie, 67 N.Y.2d 257 (1986) (lost profits must be proven “with reasonable certainty” and be “fairly within the contemplation of the parties to the contract at the time it was made”). Rather, Sunday Players was a “start-up business with no capital or manufacturing capacity, no national advertising, and no long-term deals with retailers. It had no brand recognition and meager sales.”

Second, the court rejected the estimate of the plaintiffs’ expert that, had the license been fully performed, defendant would have then sold $82,000,000 of Sunday Players’ product. It noted that plaintiffs’ expert had no marketing expertise, so any prognostications about lost value are without basis. The court out-of-hand rejected the comparison by the plaintiffs’ expert of Sunday Players to Under Armour. The comparison “posited superficial similarities” to Under Armour, the “market’s dominating force.” His comparison, which entailed in part suggesting that Sunday Players and Under Armour were comparable because they used similar grassroots marketing strategies and television advertising, is “pitched at such a high level of generality as to be totally meaningless.” Moreover, of course plaintiffs would try to emulate Under Armour’s past strategies, given the successful results, irrespective of whether Under Armour was a comparable company for purposes of damages analysis.

In sum, for these reasons and a number of others, the court concluded that the comparison with Under Armour actually proved the opposite of the plaintiffs’ expert’s argument. As a result, the jury’s lost value award was also erroneous as a matter of law, since it was premised entirely on the same expert testimony that justified the lost profits analysis. Nonetheless, since plaintiffs proved liability based on defendant’s breach of the license, the court ordered a new trial with respect to lost profit damages.

Reviewing de novo, the Second Circuit agreed and held that the vacatur of the $4,350,000 verdict and the denial of a new damages trial was correct. See Washington v. Kellwood Co., — F. Appx. —-, 2017 WL 494467 (2d Cir. Nov. 2, 2017). The Second Circuit elaborated by stating that plaintiffs’ “failed to proffer evidence from which lost profits could be established with reasonable certainty.” To wit, during the relevant period Under Armour had annual sales between $49.5 million and $195 million, whereas Sunday Players had “no record of notable sales.” Accordingly, the plaintiffs’ expert’s contention that Sunday Players’ revenues were reasonably certain to increase from a six figures to approximately $80 million “was so unfounded that it failed to establish any legal basis for awarding lost-profits damages.”

Leave a Comment November 16, 2017

The Challenge of Presenting Treating Physicians

 

By: E. Drew Britcher and Armand Leone,  of the New Jersey Law Journal, an ALM publication.

Lawyers from both sides of the litigation aisle have long battled over the presentation of opinions by treating physicians, not only with each other but with the physicians themselves and with the strategic and practical considerations of producing them. This should not be a surprise to anyone who has tried more than a few cases, but jurors tend to be more suspicious of the opinions of doctors who have been retained for litigation purposes. This was effectively confirmed by the New Jersey Supreme Court in Stigliano v. Connaught Labs , 140 N.J. 305 (1995), when the court stated:

Without impugning the expert witnesses who may testify for either plaintiffs or defendants, the treating doctors may be the only medical witnesses who have not been retained in anticipation of trial. A jury could find the treating doctors’ testimony to be more impartial and credible than that of retained experts.

However, despite that credibility, the AMA’s position in section 9.07 of their Principles of Medical Ethics that physicians must reasonably cooperate with their patient’s litigation support, and the decision in Spaulding v. Hussain , 229 N.J. Super. 430, 440 (App. Div. 1988), noting that “unless otherwise agreed, a physician treating an accident victim ‘impliedly agrees to appear and testify on behalf of his patient on issues such as the nature, extent and causality of his patient’s injuries,” many doctors are less than cooperative in a patient’s litigation.

Following the Stigliano decision, where neither of the involved doctors had prepared any reports of their opinions, it became accepted that doctors could testify to any opinion on causation that they had arrived at, during the course of their medical treatment. Subsequently, the Rules of Court were amended to reflect a requirement that the identity of experts and treating physicians, who would testify at trial, and their reports, be produced in discovery. While this represented no change as to experts or treating physicians offering certain opinions arrived at for the purpose of the litigation, such as an opinion on permanency, to many, this is a departure from what the court said in Stigliano.

 

Enter the court’s decision in the matter of Delvecchio v. Township of Bridgewater , 224 N.J. 559 (2016), a LAD case where the testimony of a treating physician regarding a plaintiff’s disability was sought to be introduced. The court, citing to past precedent, cited with the Stigliano matter, stated:

The testimony of a treating physician is subject to an important limitation. Unless the treating physician is retained and designated as an expert witness, his or her testimony is limited to the diagnosis and treatment of the individual patient. Given that distinction, if a particular claim requires testimony beyond the plaintiff’s own diagnosis and treatment, the plaintiff may require the testimony of an expert, conforming to NJRE 702 and 703.

Delvecchio, 224 N.J.at 579.

This requirement places the attorney that is seeking that doctor’s testimony at conflict with the doctor, who takes the position that they did not bargain for being involved and inconvenienced by the plaintiff’s litigation or who demands an outrageous fee for meeting their ethical obligations to their patient. Plaintiff’s counsel sought to have the court conclude that the report required by the combination of Rules 4:17-4(a), (e) and 4:10-2(d)(1) is only an obligation that exists if one is prepared—a contention the court specifically rejected. “Under the court rules, a party seeking to present physician testimony at trial must disclose the substance of the witness’s anticipated testimony, and the basis for that testimony, if requested to do that in discovery.”

So, what is a lawyer supposed to do when a doctor refuses to prepare a report? On the plaintiff’s side, one alternative is to have all the plaintiff’s medical records reviewed by a separate physician and have that doctor examine the patient and testify to the whole of the opinions needed about care, treatment, causation, disability and permanency. This would lose the innate credibility that a truly coincidental treating physician’s would potentially hold. So, the alternative is that an attorney should contact the physician and his/her staff and arrange to speak to the physician at a time convenient to the doctor and determine what opinions are not reflected by the doctor’s records and prepare a summary of the treating physician’s anticipated testimony. Should the doctor remain recalcitrant to writing a report or agreeing to an interview, one can always serve the doctor with a subpoena for a deposition. While this may not enamor one to the doctor, it will often get their attention sufficiently to get them to agree to one or the other. Not only is this something that practitioners have done in such situations before Delvecchio, the use of a summary of opinions is an authorized approach in our Rules regarding criminal procedures, as well as being what the court suggested that the Civil Practice Committee consider as an amendment to the rules at issue.

Let this not suggest that this is only the plaintiff’s counsel’s headache. The decision would seem to place a similar onus on defense counsel who might want to elicit testimony from treating physicians that is damaging to the plaintiff, akin to what the defense obtained in Stigliano. So how do they comply? The answer lies in the use of the interview process under Stempler v. Speidell , 100 N.J. 368 (1985). The defense attorney should send the plaintiff’s counsel an authorization to be signed by their client permitting an interview of the treating physician, arrange for the same, and then likewise prepare and serve a summary of the physician’s anticipated testimony. The failure to do so would seem to place defendants in a similar position of possibly being barred from calling the treater.

This approach by each side should not only satisfy the adversary and the court, it should let the practitioner sleep more soundly at night.•

 

Britcher and Leone and are founding partners of Britcher Leone LLC (www.medmalnj.com) based in Glen Rock.

Leave a Comment May 12, 2017

Elite Plaintiffs Lawyer Accused of Concealing Payments to Expert Witnesses

Originally published on Law.com, an ALM Media publication, on May 5, 2017.

By: Amanda Bronstad

Johnson & Johnson, hoping to reverse a $502 million verdict, is accusing plaintiffs attorney W. Mark Lanier of lying to a federal judge and jury about payments he made to two expert witnesses in a pivotal hip implant trial last year in Dallas.

The allegations against the Houston lawyer surfaced in documents unsealed this week by the U.S. Court of Appeals for the Fifth Circuit, which is hearing Johnson & Johnson subsidiary DePuy Orthopaedics Inc.’s appeal of the verdict. In an April 18 appeal brief, Johnson & Johnson lawyers Paul Clement and John Beisner said a “strange thing happened” when they started deposing the experts for a subsequent trial: The plaintiffs turned over checks written out to the experts, both of whom Lanier had insisted were not compensated for their testimony.

“Plaintiffs’ concealment of the fact that two critical expert witnesses had been paid or expected to be paid—at the same time their volunteer status was trumpeted to the jury and used to evade the expert-report requirement—deprived defendants of their ability to fully and fairly defend themselves,” they wrote.

The revelations, the lawyers argue, warrant a new trial and could undermine “the reliability of the entire bellwether process.”

Clement, a former U.S. solicitor general, is a highly regarded appellate lawyer and partner at Kirkland & Ellis in Washington, D.C; Beisner, who heads the mass torts, insurance and consumer litigation group at Skadden, Arps, Slate, Meagher & Flom in New York, is national litigation counsel to Johnson & Johnson.

They claim Lanier donated $10,000 to one expert’s grade school, followed by a $35,000 check for his services. A second expert, they wrote, allegedly admitted that he had expected to be paid from the start; once the trial ended, Lanier cut him a check for $30,000.

In an email, Lanier called the allegations “laughable if it weren’t so sad.”

“Everything I SAID WAS 100% ACCURATE AND TRUTHFUL,” he wrote. “J&J paints a one-sided version, fails to tell the whole story, and leaves a false impression.”

Lanier added: “This brief is what the underlying case was full of: J&J intimidating and disparaging anyone who dares to stands in their way and seek to hold them accountable.”

Lanier’s response in the Fifth Circuit is due May 17.

“There was no agreement”

On Dec. 9, a district judge in Dallas rejected Johnson & Johnson’s motion for new trial based on the same allegations. In that order, which also was unsealed this week, U.S. District Judge Edward Kinkeade of the Northern District of Texas found no evidence of fraud.

“The evidence before the court tends to show that at the time of trial there was no agreement for compensation between plaintiffs’ counsel and the [experts],” the judge wrote. The defendants also ignored the fact that their own experts received “far larger payments” for their testimonies. “Defendants have not shown how evidence of plaintiffs’ experts receiving a fraction of the compensation of defendants’ experts would have produced a different result at trial.”

The $502 million verdict in March 2016 was followed by a $1.04 billion verdict on Dec. 1, 2016 in the second and third bellwether trials in multidistrict litigation over DePuy’s Pinnacle hip implants. (The $1 billion verdict was later cut to $540 million.) More than 9,000 lawsuits have been filed alleging the devices caused pain and subsequent removal surgeries. DePuy won the first verdict in 2014.

The Pinnacle is one of several mass torts that resulted in substantial verdicts against Johnson & Johnson in 2016.

The verdict challenged by Clement and Beisner awarded five plaintiffs and three of their spouses. The jury found DePuy had failed to warn that its hip implant was defectively designed and that Johnson & Johnson aided and abetted DePuy’s actions.

DePuy has filed two appeals of the judgment. One, backed by the U.S. Chamber of Commerce in an amicus brief, challenges the “inflammatory rhetoric” at trial and a host of other “legal flaws.” The other involves the expert payments.

In that appeal, Johnson & Johnson’s lawyers wrote that Lanier’s misrepresentations about both experts, Drs. Bernard Morrey and Matthew Morrey, put him at an unfair advantage at trial. The unpaid status of his experts, who are father and son, were a central theme at trial, often contrasted with the “bought testimony” of the defense witnesses, they wrote. By insisting they were unpaid, Lanier ensured that DePuy would not have an opportunity to review expert reports prior to trial, they wrote.

They also cite Lanier’s letters to both experts a month after trial in which he noted that their testimonies “made a real difference to the jury” and felt it was unfair that they hadn’t gotten paid. The letters accompanied the two checks. Both witnesses ended up being designated as paid experts in the third bellwether trial.

But Lanier wrote there was never any financial arrangement with the experts during the trial, and neither expected to get paid by plaintiffs’ attorneys, according to his response to DePuy’s original motion. Once the second trial ended, both got checks after Lanier had a “change of heart.”

“Only by creative interpretation, omission, and outright misrepresentation are defendants able to suggest an improper arrangement that never existed,” he wrote.

 

Amanda Bronstad covers mass torts and class actions for ALM. Contact her at abronstad@alm.com. On Twitter: @abronstadlaw

Leave a Comment May 5, 2017

Motion Denied Because of Expert Witness Testimony

Originally published in The New York Law Journal an ALM Media publication, March 13, 2017.

*Part of the ALM family of award-winning legal products and publications.*

  • Supreme Court, Nassau County, IAS Part 7
  • 601626/2014
  • Justice Arthur M. Diamond
  • For Plaintiff: For Plaintiffs: Kushnick Pallaci, PLLC.
  • For Defendant: For Defendants: Foran Glennon Palandech Ponzi & Rudloff, PC.

Cite as: Percora v. Bankers Standard Ins. Co., 601626/2014, NYLJ 1202780991401, at *1 (Sup., NA, Decided March 1, 2017)

CASENAME

Frank Percora and Lisa Percora, Plaintiff v. Bankers Standard Insurance Co., ACE Private Risk Services, Defendants

601626/2014

Justice Arthur M. Diamond

Decided: March 1, 2017

ATTORNEYS

For Plaintiffs: Kushnick Pallaci, PLLC.

For Defendants: Foran Glennon Palandech Ponzi & Rudloff, PC.

The following papers having been read on this motion:

Notice of Motion 1

Opposition 2

Reply 3

 

Defendants herein move for summary judgment to dismiss the Plaintiffs’ complaint pursuant to CPLR §3212. Plaintiffs oppose the instant application. After consideration, Defendants’ motion is denied in its entirety.

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. Alvarez v. Prospect Hospital, 68 NY2d 320, 508 NYS2d 923 (1968). To make a prima facie showing, the motion must be supported by affidavit, by a copy of the pleadings and by other available proof, such as depositions and written admissions. Id. Once a prima facie showing has been made, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action. Id.; see also Zuckerman v. City of New York, 49 NY2d 557, 427 NYS2d 595 (1980).

Summary judgment is the procedural equivalent of a trial and must be denied if any doubt exists as to a triable issue or where a material issue of fact is arguable. Rivers v. Birnbaum, 102 AD3d 26, 953 NYS2d 232 (2nd Dept., 2012). In considering a motion for summary judgment, the function of the Court is not to determine issues of fact or credibility, but merely to determine whether such issues exist. Id. at 42, 243.

In general, it is the insured’s burden to establish coverage and the insurer’s burden to prove the applicability of an exclusion. Great American Restoration Services, Inc. v. Scottsdale Insurance Co., 78 AD3d 773, 911 NYS2d 142 (2nd Dept., 2010). An exclusion from coverage must be specific and clear and any ambiguity must be construed most strongly against the insurer. Id at 776, 142. The test for ambiguity is whether the language is susceptible of two reasonable interpretations, and the focus of the test is on the reasonable expectations of the average insured. Id. at 776, 142-143.

The action before the Court arises out of damage to Plaintiffs’ home in Long Beach, New York, as the result of Superstorm Sandy. Plaintiffs’ complaint has a single cause of action for breach of contract. The allegations in the complaint refer to damage to Plaintiffs’ home solely caused by the high winds of the storm, only. The interrogatories of Plaintiffs attached to Defendants’ moving papers acknowledge that they did not have a flood insurance policy in place at the time the alleged damage was sustained to their home.

Defendants’ motion for summary judgment to dismiss the complaint is based upon the premise that all of the damage to Plaintiffs’ home as a result of the storm was caused by water, which is excluded from coverage under the policy. In support of this position, Defendants attach excerpts of depositions transcripts taken of Plaintiff Frank, as well as three expert witnesses disclosed by Plaintiffs during discovery. None of these transcripts are in their completed form and all have had pages from the transcript removed prior to submission herein. Defendants have not attached an affidavit or a complete deposition transcript such that would allow the Court to consider their papers to be sufficient to consider judgment as a matter of law. By reasons of this defect, the Defendants’ request is appropriately denied in its entirety. See Mazzarelli v. 54 Plus Realty Corp., 54 AD3d 1008, 864 NYS2d 554 (2nd Dept., 2008); see also generally Marks v. Robb, 90 AD3d 863, 935 NYS2d 593 (2nd Dept., 2011).

Even assuming, arguendo, that Defendants did properly include full copies of certified depositions transcripts of the Plaintiff and/or any one of its experts, Defendants motion still cannot be granted. It appears uncontroverted by the papers that Plaintiffs did not have flood insurance for the subject property; moreover, nowhere in Plaintiffs’ opposition papers do plaintiffs suggest that damage caused by water should be covered under the policy, as the exclusion clause for water is clear. Instead, Plaintiffs argue that the damage asserted that is part of the denial of coverage by Defendants was for wind damage, which is clearly covered under the policy terms.

In reviewing the complete transcript of Plaintiffs’ expert witness Boccia, as well as the complete transcript of expert witness Wallwork, both attached to Plaintiffs’ opposition papers, there are triable issues of fact that are certainly outstanding. For example, Defendants in their moving papers suggest that both of these witnesses acknowledge that the damage to the home of Plaintiffs was caused by water only. However, the completed transcript of Mr. Boccia on pages 62 through 69 make clear that damage can be attributed to wind, or water, or both, and that damage, such as racking, can be attributed to wind alone regardless of the water damage that may have occurred to the home. Similarly, Mr. Wallwork testified that he too was able to parse out damage cause by wind alone versus damage caused by water either in whole or in part. For this reason, granting of summary judgment to Defendants would be improper, and the instant motion is hereby denied.

Given the foregoing, the parties are directed to appear as scheduled in the DCM Trial Part of Supreme Court, Nassau County, on March 30, 2017 at 9:30 am.

This hereby constitutes the decision and order of this Court.

Dated: March 1, 2017

Original Source: http://www.newyorklawjournal.com/id=1202780991401?keywords=expert+witness&slreturn=20170210091937 

Leave a Comment March 10, 2017

Florida May Be Reverting to Frye Standard for Admissibility of Expert Testimony

Originally published in Daily  Business Review, an ALM Media publication, March 2, 2o17.

*Part of the ALM family of award-winning legal products and publications.*

By:  April M. Dahl

The Florida Supreme Court issued a highly anticipated decision on Feb. 16 regarding the admissibility of expert testimony in Florida.

After less than four years as a presumptive Daubert state, Florida may be reverting to the Frye standard to govern the admissibility of expert testimony, a standard which many find to be archaic and out of touch with its federal counterpart. Although the decision was not unexpected, its impact will be significant for trial attorneys statewide due in large part to the unresolved questions left in its wake.

The Court of Appeals of the District of Columbia gave birth to Frye v. United States in 1923. Florida subsequently adopted the test espoused by the Frye court, which requires a two-prong inquiry for the admissibility of scientific evidence: whether the scientific theory or discovery from which the expert derived his/her opinion is reliable, and whether the opinion is accepted in the scientific field. The Frye standard reigned supreme nationwide for almost 70 years.

In 1993, the U.S. Supreme Court adopted a new, more stringent standard governing the admissibility of expert testimony with Daubert v. Merrell Dow Pharmaceuticals. In Daubert, the court held that the Federal Rules of Evidence, and not Frye, provided the standard for admitting expert testimony at trial. Under Daubert, the trial court is tasked with evaluating the credentials of the proffered expert witness and serving as a gatekeeper to ensure that the testimony is based upon reliable foundation. The court noted that under the Federal Rules of Evidence, the trial judge must make a preliminary determination of whether the underlying methodology is scientifically valid. The Daubert court identified non-exclusive factors that a court may consider: whether the methodology has been or is amenable to testing, whether it has been subjected to peer review and/or publication, the known and potential error rate of the methodology and whether it has been generally accepted in the relevant scientific community.

 

Many states adopted the Daubert analysis shortly thereafter. Florida appeared to be one of the minority holdouts until July 1, 2013, when the Florida Legislature in House Bill 7015 amended Florida Statutes Sections 90.702 and 90.704 to replace the standard for expert testimony from the test set out in Frye to the test set forth by the U.S. Supreme Court of the in Daubert. These amendments to the Florida statutes mirror their counterparts contained in the Federal Rules of Evidence regarding the admissibility of expert testimony almost verbatim.

Case Vs. Rule

In its recent decision, the Florida Supreme Court declined to adopt certain legislative changes to the Florida Evidence Code, but only to the extent that the proposed changes were ‘procedural,’ the most significant of which were the newly enacted 90.702 and 90.704. In doing so, the court noted that it has been its policy to adopt procedural provisions of the Florida Evidence Code as enacted by the Florida Legislature. This departure underscores the significance and impact of the court’s decision.

In reaching its decision, the court cited “grave constitutional concerns” raised by the Florida Bar’s code and rules of evidence committee. In particular, the court found that the Daubert amendment may undermine a litigant’s right to a jury trial and deny access to the courts. Although the court raised these issues, it did not address the constitutionality of the statutes at this time. Rather, the court relied upon these “grave constitutional concerns” as the impetus for departing from its policy of adopting procedural provisions of the Florida Evidence Code.

The manner in which court attempted to resolve the present Frye vs. Daubert debate has not in fact definitively resolved the issue. Importantly, the Florida Supreme Court declined to address the remaining question — whether the Legislature’s attempt to transition Florida from Frye to Daubert was a substantive rather than a procedural change. The court left that question open for a “proper case or controversy.”

If the Daubert amendment is found to be procedural in a “proper case or controversy,” then Florida will revert to the arguably outdated Frye standard. On the other hand, if the Legislature’s amendment is subsequently held to be substantive, Florida may now be a Daubert state after all.

Until such a ruling, however, members of the state bar are left searching for the next case to provide direction regarding the appropriate standard governing the admissibility of expert testimony.

 

April M. Dahl is a partner in the Fort Lauderdale office of the national law firm of Hinshaw & Culbertson. She focuses her practice primarily in tort litigation, including products liability, toxic tort, indoor air quality, chemical exposure, construction defect, premises liability, automobile and general liability matters. Contact her at adahl@hinshawlaw.com.

Original Source: http://www.dailybusinessreview.com/id=1202780342439?back=law

 

Leave a Comment March 3, 2017

Milberg Strengthens Litigation Support and Data Hosting with Division SpinOff

Milberg Announces Spin Off of Litigation Support and Data Hosting Services Division: Based in Stamford, Conn., the new business will continue to serve litigants throughout their discovery process from the start of a case assessment to trial.

Original published on: Legaltech News, November 19, 2015

By: Trudy Knockless

Milberg, a class action and complex litigation firm, has made structural changes, spinning off its litigation support and data hosting services division into an independently-owned business.

Renamed Meta-e Discovery, the new business will continue to serve litigants, mainly plaintiffs, throughout the discovery process from the beginning of a case assessment to trial.

“The principal purpose [of the spin off] is to enable the business to be more flexible and nimble to its litigation support and data hosting clients’ needs. Working under the umbrella of a law firm can pose some limitations insofar as growth opportunities, including servicing other law firms. We now have a broader base for business development,” Paul H. McVoy, who was appointed Milberg’s chief discovery officer in February, told Legaltech news. He said this move will enable the company to market itself in a new, distinct way, which will allow it to grow dramatically in the short term.

The new business can now bring in services that may not have made sense in the law firm context, forensics and consulting for example. Additionally, the company has an opportunity to create strategic alliances that allows them to offer more services from a wide base of service providers that will complement the services offered by Meta-e.

“We will continue building a go-to discovery resource for small and midsized firms and entities that have been traditionally overlooked by the bigger electronic discovery providers,” McVoy, who has been with Milberg for more than six years, added. “We will also be able to cater to plaintiff firms in a way that no one else can because we came from the plaintiff bar; we have crafted customized workflows that uniquely serve that bar.”

Milberg’s litigation support and data hosting services division was formed five years ago as a spin-off to its eDiscovery Legal Practice.

“This is the logical next step for what we have been building,” Ariana J. Tadler, executive committee member and group founder, said in a statement. “The new company is the perfect model for law firms seeking e-discovery services from those who have been in the trenches fighting the battle every day in real cases.”

Based in Stamford, Conn., the new business will continue to manage Milberg’s ongoing litigation support needs, as well as current customers. Meta-e Discovery will assist customers in maximizing the benefits of its existing Relativity Platform with its own proprietary workflow that aims at leveraging technology-assisted review that applies to productions received. Additionally, the company will develop new mobile computing and artificial intelligence software, specifically geared to the discovery process.

“We are very excited by this move,” McVoy told Legaltech News. “The reception in the legal community and service provider community has been extremely positive. The market recognizes that there is an underserved segment that desperately needs the services, experience and expertise we offer. We look forward to helping these firms litigate their cases with the same tools as the larger firms, and as we are fond of saying, ‘leveling the discovery playing field.’”

 

Original Source: http://www.legaltechnews.com/id=1202742914129/Milberg-Announces-Spin-Off-of-Litigation-Support-and-Data-Hosting-Services-Division#ixzz3s4IjX3Wc

Leave a Comment November 20, 2015

Tech in Trial: Advancing Techniques Means Increased Preparation

If a Picture is Worth a Thousand Words, Is a Trial Tech Expert Worth $200 an Hour?

Originally published on: The Litigation Daily, November 10, 2015

By: Jenna Greene

 

Andrew Cox, who leads Thompson Hine’s product liability practice, is a Gen Xer, the kind of guy you might think would be all over using technology in the courtroom. He even has a goatee.

But the 43-year-old litigator is distinctly old-school when it comes to presentations in court.

He won a trial in May, a defense verdict in Ohio state court case involving a fatal plane crash.

The plaintiffs used fancy animation—a short video depicting their version of what went wrong.

Cox had a big aerial photo of the airport mounted on a magnetic board. And he had magnets showing where each eye witness was positioned, plus a magnetic airplane he could move across the photo.

“We used it in the opening, our experts used it, we used it in the closing,” he said. “And it was tangible—a Google Earth photo. People knew it was real.”

As for the animation, he said the plaintiffs lawyers were constantly starting, stopping and replaying it, dividing the jurors’ attention between the screen, the expert witness and the tech doing the rewinding.

“I’ve never seen a perfect animation,” Cox added. In this video, a small detail was off: the accident took place in Ohio in March, when the trees are still bare. In the animation, the trees were green and leafy.  It was a subtle reminder that the events depicted weren’t real, he said.

In the end, neither the video nor the magnet photo was probably the deciding factor for the jury. But it’s all part of the bigger task at trial: to tell your client’s story.

The question is, what visual aids will help accomplish that, and which might be glitzy distractions? Do you have the wisdom to tell the difference?

Robb Helt, director of trial technology for Suann Ingle Associates, makes a compelling case that the best reason to hire a tech consultant is not to get “someone sitting behind the scenes putting things on a screen and pushing buttons,” he said. “A monkey with enough bananas can push buttons.”

Rather, trial technology consultants offer experience—the best of them have seen more trials than most lawyers. Helt, for example, has racked up 513 trials, arbitrations and mediations since 1999. Among them: 16 months as Halliburton’s trial technology consultant in the Deepwater Horizon oil spill litigation.

As a result, he said, he’s developed  “a really good feel for what’s worked here and not there.”

Lawyers often “have an idea of what they want, but not what they need” when it comes to using technology to present their cases, Helt continued.

For about $200 to $250 an hour, consultants can help figure that out, design the graphics and make sure it all works seamlessly in court. They can also make sure lawyers don’t “over-egg the pudding” with too many high tech elements, Helt added.

But it’s not the easiest time to be a trial technology consultant. For starters, fewer cases are going to trial. And the technology is getting easier to use—which means more lawyers are bypassing the consultants and doing it themselves.

In large part, credit the iPad and apps like TrialPad, which for about $130 can do nifty things like highlight text, create side-by-side document comparisons and edit and show video clips.

“An iPad not only increases an attorney’s mobility in the courtroom, but it also allows the attorney far greater control over the presentation of evidence to the judge and jury,” wrote Alexander Rusek of White Law in an article  last year for the American Bar Association’s trial evidence committee. “No longer must an assisting attorney attempt to coordinate the presentation of exhibits or highlight or enlarge the exact portion of an exhibit for the presenting attorney.”

Which is great, provided the attorney doing the presenting knows what he or she is doing.

Solo practitioner Carolyn Elefant, who writes the blog My Shingle, last month told of prepping for her first jury trial in more than a decade. She opted to use an iPad for photos, charts and presenting impeachment material to the witnesses. And she learned how to do it 10 days before the start of trial.

She won three six-figure verdicts for her clients.

“While ultimately, it was the strength of the prep, the evidence and fact and expert witnesses and not the iPad that produced the win, the iPad allowed me to present that evidence in a far more professional and seamless a manner than would have been possible at my last trial ten years ago,” she wrote.

Contact Jenna Greene at jgreene@alm.com or on Twitter @jgreenejenna.

Original Source: http://www.litigationdaily.com/id=1202742147525/If-a-Picture-is-Worth-a-Thousand-Words-Is-a-Trial-Tech-Expert-Worth-200-an-Hour?mcode=1202615798744

Leave a Comment November 11, 2015

The Benighted Expert: Professional Literature in Court

Originally published for:  New York Law Journal

By: Timothy M. Tippins

From questions of property values in equitable distribution litigation to the psychological issues in custody cases, the domestic relations courts are awash in expertise, both real and contrived. It falls to the trial advocate to present the information that the court needs so that it can distinguish reliable testimony from the ersatz expertise that too often slithers into the courtroom.

One long-entrenched method of doing so is impeachment by treatise1 which consists of confronting the witness with published writings of respected figures in the field that contradict the expert’s testimony in some respect. Perhaps because this technique has been around for so long it tends to eclipse the broader importance of professional literature in measuring both the admissibility of and the weight to be accorded to an expert’s testimony. This article will examine the central position that professional literature occupies in the psychology expert’s world and its crucial evidentiary role in providing the very basis underlying expert opinions.

Impeachment by Treatise

The impeachment by treatise rule allows the cross-examiner to confront the expert witness with writings of other experts that purportedly contradict the position of the expert on the stand. Before being allowed to do so, however, the cross-examiner must first lay the required foundation by extracting from the witness a concession that either (1) the expert relied upon the work at hand or (2) the texts at hand are “recognized by the profession as standard authorities.”2 This foundational requirement, of course, empowers the witness to frustrate the cross-examination simply by refusing to concede that the writing is authoritative.

This power can be and is abused. Experts at times tender absurd denials of the standing of a respected work to evade proper exploration of their positions. Indeed, books written to assist the expert through the courtroom thicket sometimes suggest that the expert should rarely if ever concede the authoritative status of any text.3 Taken literally this would be equivalent to an evidence professor denying that Wigmore on Evidence is an authority in the field.

Some experts follow this course of action to a fault. One “expert” in infectious disease apotheosized this artifice when he testified “that he did not consider any books or articles in the field of infectious diseases ‘authoritative.’”4 Absorb that statement for a moment. It is tantamount to proclaiming, “I don’t hold with no book-learnin’.” It demands, of course, the next question: If not from the authoritative literature of the field, then from what source did this expert acquire his or her expertise?

Very recently a decision was reported wherein an expert, when asked from what source he derived the methodology that provided the underlying basis of his opinion, answered: from “my head.”5 Leaving aside for the moment the possibility that he was confused as to which anatomical hollow was the true cradle of his expertise, the question such an answer irresistibly invites is how the expert knowledge arrived in his cranial cavity in the first place.

The Basis of Expertise

To appreciate fully the incongruity of such flippant answers, one must consider them in the context of established evidence doctrine. Except in those relatively rare instances where the expert is testifying entirely on the basis of his or her own research, the expertise which he or she purports to bring to court necessarily depends upon the professional literature of the field. Recognition of this fundamental point is precisely why the law tolerates a hearsay basis with respect to the expert’s knowledge of the field. As the celebrated John Henry Wigmore wrote a century ago:

It would be absurd to deny judicial standing to such knowledge, because all scientific data must be handed down from generation to generation by hearsay, and each student can hope to test only a trifling fraction of scientific truth by personal experience.6

Thus, if the expert’s contention that there are no authoritative writings in his field were true, it would be time for him to depart the courtroom without another word spoken.

While some species of expertise can be acquired by experience alone, e.g., an antiques dealer who testifies to value based on decades of first-hand market transactions, others depend upon formal education, degrees, board certifications and the like. Psychology falls into this latter category.

A Scientific Discipline

Psychology defines itself as a scientific discipline. Every Psychology 101 textbook will contain a statement such as: “Psychology is the science of behavior and mental processes.”7 Consequently, to qualify as an expert in psychology one is required to have adequate formal credentials in this scientific field and, once so qualified, is expected to base his conclusions on the scientific knowledge of that discipline. That the expert must predicate his conclusions on the collective knowledge of his discipline is axiomatic. It was acknowledged by the U.S. Supreme Court in its landmark decision in Daubert v. Merrill Dow Pharmaceuticals.

Unlike an ordinary witness, an expert is permitted wide latitude to offer opinions, including those that are not based on firsthand knowledge or observation. Presumably, this relaxation of the usual requirement of firsthand knowledge…is premised on an assumption that the expert’s opinion will have a reliable basis in the knowledge and experience of his discipline.8

Reliance upon the collective knowledge of the discipline, i.e., the professional literature, is the sine qua non of expert opinion formulation. It is precisely this that distinguishes an admissible expert opinion from an inadmissible personal opinion. This most fundamental of principles is recognized within the field of forensic psychology:

The defining attributes of an expert opinion relate…to the procedures that were employed in formulating the opinion and the body of knowledge that forms the foundation upon which those procedures were developed. If the accumulated knowledge of the expert’s field was not utilized, the opinion expressed is not an expert opinion. It is a personal opinion, albeit one being expressed by an expert.9

Given that most custody evaluators do not conduct their own research they must necessarily rely upon the studies of others as reported in the professional literature. Therefore, it is against this professional knowledge base that the validity of their testimony must be measured. If the witness has based an opinion on neither first-hand research nor the professional literature of the discipline, the opinion ought to be rejected.

Suppose, for example, that a custody evaluator observes that one of the parents exhibited behaviors “A,” “B” and “C” and from these data-points concludes that the parent suffers from depression. The initial crucial question is whether that conclusion is supported by the empirical research reported in the professional literature.10 If only some idiosyncratically crafted paradigm of the individual witness supports his conclusion, what is at hand is an inadmissible personal opinion, not an expert conclusion. Such idiosyncratic assumptions or methodologies, not having been tested in the field and lacking general acceptance, should not even survive a Frye11 challenge. Even if the threshold issue of admissibility is ignored such an opinion ought to be given no weight.

The critical question, therefore, is to what extent are the expert’s conclusions supported by the literature? Perhaps even more fundamentally, to what extent is the witness even familiar with the published writings of the field? The trial lawyer will likely find these lines of inquiry fruitful. Reported research suggests that relatively few experts consider the literature in their practices. In one study, 27 percent of clinicians interviewed stated that “no empirical study had affected their work” and not a single “psychologist was able to identify a specific study or a specific instance of research use.”12 Given psychology’s self-declared status as a science, such a cavalier disregard of the expert knowledge base is nothing short of astonishing.

Custody Evaluators

The professional literature occupies a central position in the proper conduct of a custody assessment. The ethical and practice standards of the mental health profession require custody evaluators to keep current with and to use scientific knowledge in carrying out their forensic assignments.

The American Psychological Association’s (APA) Ethical Principles and Code of Conduct state:

Psychologists’ work is based upon established scientific and professional knowledge of the discipline.13

The APA Guidelines for Child Custody Evaluations state:

Although psychologists take care to acquire sufficient knowledge, skill, experience, training, and education prior to conducting a child custody evaluation, this acquisition is never complete. An evolving and up-to-date understanding of child and family development, child and family psychopathology, the impact of relationship dissolution on children, and the specialized child custody literature is critical to sustaining competent practice in this area.14

Likewise the Association of Family and Conciliation Courts’ Model Standards of Practice for Child Custody Evaluation instruct that:

A child custody evaluator shall have specialized knowledge and training in topics related to child custody work and shall keep abreast of the ever evolving research in the field.15

Clearly, the profession itself recognizes that the scientific literature is the touchstone for the formulation of psychological conclusions. Thus, to properly assess the expert’s conclusions, one must look to the published writings. Significantly, what is not there is as important as that which is because the burden rests upon the expert to offer up the empirical research that reflects general acceptance in the scientific community of the principles or methods upon which each inference rests.16 Such burden placement is consistent with scientific practice:

A basic tenet of science is that the burden of proof always falls squarely on the claimant, not the critic. Consequently, it is up to the proponents of these techniques to demonstrate that they work, not up to the critics of these techniques to demonstrate the converse.17

In other words if the evaluator searches the professional library and, like Mother Hubbard, finds the cupboard bare, then he or she should not opine at all on the particular issue. To disregard the absence of scientific knowledge or to ignore contrary research runs afoul of the ethical and practice standards of the profession and results in the presentation of shoddy, unreliable work-product.

Conclusion

The professional literature of the expert’s discipline must be the anchor of his or her opinions. When expert witnesses deny the respected status of all or virtually all existing literature, such denials raise critical questions as to intellectual integrity of their conclusions. Accordingly, it behooves attorneys to master the literature of that expert’s discipline and be positioned to use it in court both through cross-examination and by presenting expert rebuttal testimony establishing the true status of the texts in question.

Endnotes:

1. People v. Feldman, 299 N.Y. 153, 85 N.E.2d 913 (1949); see also, Hastings v. Chrysler Corp., 273 A.D. 292, 294, 77 N.Y.S.2d 524 (1st Dept. 1948); Ithier v. Solomon, 59 A.D.2d 935, 399 N.Y.S.2d 450 (2d Dept. 1977); Mark v. Colgate, 53 A.D.2d 884, 385 N.Y.S.2d 621 (2d Dept. 1976).

2. People v. Feldman, 299 N.Y. 153, 85 N.E.2d 913 (1949); see also, Hastings v. Chrysler Corp., 273 A.D. 292, 294, 77 N.Y.S.2d 524 (1st Dept. 1948); Ithier v. Solomon, 59 A.D.2d 935, 399 N.Y.S.2d 450 (2d Dept. 1977); Mark v. Colgate, 53 A.D.2d 884, 385 N.Y.S.2d 621 (2d Dept. 1976).

3. Brodsky, S.L., Hendricson, S., “Testifying in Court: Guidelines and Maxims for the Expert Witness,” pp. 119-123 (APA, 1991).

4. Lipschitz v. Stein,10 A.D.3d 634, 636, 781 N.Y.S.2d 773 (1st Dept. 2004) [italics added].

5. Toomey v. MillerCoors, — F.Supp.3d —, 2015 WL 667508 (E.D.N.Y.), NYLJ Feb. 27, 2015.

6. John Henry Wigmore, Greenleaf on Evidence,(16th Ed. Rev.), §430(l), p. 529 (The Lawbook Exchange, 2001).

7. Morris, C.G., Maisto, A.A., “Psychology: An Introduction,” (Prentice Hall, 2002), p. 4 (Italics added)

8. 509 U.S. 579, 592, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) (Italics added); This is a fundamental evidentiary principle concerning expert testimony and is not dependent upon whether one is a Daubert jurisdiction.

9. Martindale, D.M., “Cross-examining Mental Health Experts In Child Custody Litigation,” The Journal of Psychiatry & Law, 29/Winter 2001, 483-511

10. Even assuming that the diagnostic conclusion is supported by research the next critical inquiry is whether there is research demonstrating that there is a nexus between the diagnosis and the question of parenting capacity. Without such a nexus, the diagnosis is not relevant.

11. Frye v. United States, 54 App.D.C. 46, 47, 293 F. 1013, 1014 (1923).

12. Cohen, L.H., Sargent, M.M., Sechrest, L.B., “Use of Psychotherapy Research by Professional Psychologists,” American Psychologist, February 1986 Vol. 41, No. 2, 198-206 (1996).

13. Ethical Principles Of Psychologists And Code Of Conduct, §2.04, American Psychological Association, (2002).

14. Guidelines for Child Custody Evaluations in Family Law Proceedings, §4, American Psychologist, December 2010.

15. Model Standards of Practice for Child Custody Evaluation , §1.1, Family Court Review, Vol. 45 No. 1, January 2007 pp. 70–91.

16. People v. Wesley, 83 N.Y.2d 417, 442, 633 N.E.2d 451, 611 N.Y.S.2d 97 (1994); see also, People v. Angelo, 88 N.Y.2d 217, 666 N.E.2d 1333, 644 N.Y.S.2d 460 (1996).

17. Lilienfeld, Lynn & Lohr, “Science and Pseudoscience in Clinical Psychology,” Guilford Press, 2003, p. 3.
Original Source: http://www.newyorklawjournal.com/id=1202719630250/The-Benighted-Expert-Professional-Literature-in-Court#ixzz3TcrbI78D

Leave a Comment March 6, 2015


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