Commercial Litigation and Arbitration

Daubert — Economic Expert Testimony — Ghostwriting Expert Reports

District Judge Barbara Crabb addressed a series of Daubert motions directed at economic expert testimony in Southwire Co. v. J.P. Morgan Chase & Co., 2007 U.S. Dist. LEXIS 30294 (W.D. Wis. April 24, 2007), an antitrust action for, inter alia, price fixing in the copper market. The details of the testimony are complicated, but several of the holdings are straightforward and illuminating.

[1] Gatekeeper vs. Factfinder. ‛In serving its gatekeeping function, the court must be careful not to cross over into the role of factfinder. It is not the job of the court to insure that the evidence heard by the jury is error-free, but to insure that it is not wholly unreliable. Smith v. Ford Motor Company, 215 F.3d 713, 719 (7th Cir. 2000)(‘[W]hether the expert is credible or whether his or her theories are correct given the circumstances of a particular case is a factual one that is left for the jury to determine after opposing counsel has been provided the opportunity to cross-examine the expert...’).“

[2] Preclusion vs. Cross-Examination. ‛Defendants will have ample opportunity to cross-examine [expert] Gilbert at trial and present competing expert evidence .... In the end, however, whether Gilbert erred in applying his model and whether he failed to properly correct for [an observed phenomenon] are jury questions not amenable to resolution on summary judgment.“

[3] Weight vs. Admissibility. ‛Although some regression analyses may be so incomplete as to be inadmissible, in most cases, ‘failure to include variables will affect the analysis' probativeness, not its admissibility.’ Bazemore v. Friday , 478 U.S. 385, 400 (1986); see also Cullen v. Indiana University Board of Trustees, 338 F.3d 693, 702 n. 4 (7th Cir. 2003)(citing Bazemore, 478 U.S. at 400). A ‘statistical study is not inadmissible merely because it is unable to exclude all possible causal factors other than the one of interest.’“

[4] Counsel's Role in Drafting Report. ‛[T]he fact that plaintiffs' counsel drafted [expert] Henry's initial and revised declarations is not a ground for excluding his report and testimony. As plaintiffs note, ‘Rule 26(a)(2)(B) does not preclude counsel from providing assistance to experts in preparing the reports, and indeed ... this assistance may be needed.’ Fed. R. Civ. P. 26(a)(2)(B) advisory committee's note (1993). Although an expert report ‘should be written in a manner that reflects the testimony to be given by the witness and ... must be signed by the witness,’ it need not be drafted by him.“

[5] Expert Involvement in Report. ‛[Expert] Henry did not merely parrot the arguments of counsel; he reached his own conclusions after a lengthy process .... Consequently, his report will not be excluded as the work of anyone other than himself.“

[6] Expert Reliance on Work of Others. ‛[E]xperts may rely on data and other information supplied by third parties. Analyzing data assembled by others is neither illicit nor unusual, even if the data were prepared for litigation by an interested party. Unless the expert's opinion is too speculative, it should not be rejected as unreliable merely because the expert relied on the reports of others. Defendants argue that ‘[a]nalysis becomes more complicated if the assistants aren't merely gofers or data gatherers but exercise professional judgment that is beyond the expert's ken.’ Here, however, both experts were positioned to supervise and independently evaluate the data collection being done by others who assisted them“ (citations omitted).

[7] Competence of Others Relied On. ‛Whether the experts employed competent assistants, properly instructed them or ultimately relied on faulty judgments of others goes to the weight and not the admissibility of their opinions.“

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