Nacchio Tenth Circuit Reversal — Criminal vs. Civil Expert Disclosure; Economic Expert Testimony; New Judge on Retrial

From United States .v Nacchio, No. 07-1311 (10th Cir. March 17, 2008):

1. Expert Disclosure under Criminal Rule 16 Is Narrower than Civil Expert Discovery under Rule 26(a)(2)(B). “The district court’s error may have proceeded from confusion between the civil and criminal rules. Unlike under the civil rules, an expert in a criminal case is not required to present and disclose an expert report in advance of testimony. A Rule 16 disclosure must contain only “a written summary of any testimony” and “describe the witness’s opinions, the bases and reasons for those opinions, and the witness’s qualifications.” Fed. R. Crim. P. 16(b)(1)(C). In contrast, an expert’s written report in a civil case must include not only “a complete statement of all opinions the witness will express and the basis and reasons for them,” Fed. R. Civ. P. 26(a)(2)(B)(i), and his qualifications, R. 26(a)(2)(B)(iv), but also all of the data or other information considered in forming the opinion, all summary or supporting exhibits, and the compensation he was paid. Id. R. 26(a)(2)(B)(ii)–(iii), (vi). Thus, the judge’s comment that the criminal expert disclosure requirement is “pretty close to what is required in the civil area,” App. 2041, was not correct—one need only look at the text of the two rules to recognize the broader requirements of the civil rule.”

2. Proponent Must be Permitted to Proffer Evidence as to the Reliability of Expert’s Methodology. “[A]t a minimum it is an abuse of discretion to exclude an expert witness because his methodology is unreliable without allowing the proponent to present any evidence of what the methodology would be. The proponent bears the burden of establishing the admissibility of the evidence under Rule 702, but it must be given an opportunity to do so before the testimony may be ruled inadmissible.”

3. Economic Expert May Evaluate Facts in Record. “An economic expert is permitted not only to tell the jury that an economic concept ‘is an issue’ but to analyze the concept and offer informed opinions. In other words, expert testimony may ‘assist the trier of fact to understand the facts already in the record, even if all it does is put those facts in context.’ [Citation omitted.] That is why expert economic testimony is routine when a materiality determination requires the jury to decide the effect of information on the market. *** Armchair economics is not the way to decide complex securities cases.”

4. 4.2% Miss Not Necessarily Immaterial as a Matter of Law (but Close). “Thus, we are asked to decide whether a risk that a company’s revenue will fall $900 million short of its public guidance—a 4.2% shortfall—is necessarily immaterial to investors. Although it is a close question, we conclude that the answer is ‘no.’”

4. Significance of Uncontested Jury Instructions Where Challenge Is to Sufficiency of the Evidence. We have described our rule about the role of uncontested jury instructions in sufficiency-of-the-evidence review both as an application of ‘the doctrine of law of the case’ and as ‘an equitable remedy whose purpose is to prevent the government from arguing on appeal a position which it abandoned below.’ Williams, 376 F.3d at 1051. On one hand, law of the case normally applies only to issues “[a]ctual[ly] deci[ded],” 18B Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice and Procedure § 4478, at 649 (2d ed. 2002), not to arguments that are rejected. On the other, the equitable theory might apply to proffered as well as accepted instructions.

5. Three-Part Test for New Judge on Retrial (10th Circuit). “(1) [W]hether the original judge would reasonably be expected upon remand to have substantial difficulty in putting out of his or her mind previously-expressed views or findings determined to be erroneous or based on evidence that must be rejected, (2) whether reassignment is advisable to preserve the appearance of justice, and (3) whether reassignment would entail waste and duplication out of proportion to any gain in preserving the appearance of fairness.”

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