The 2010 Expert Forecast: Surge Ahead
Robert Ambrogi
Robert Ambrogi is the only person ever to hold the top editorial positions at both national U.S. legal newspapers, the National Law Journal, and Lawyers Weekly USA. An experienced attorney, ADR professional, writer and legal technologist, Bob formerly served as director of the Litigation Services division at American Lawyer Media.
The New Year has barely begun, but all indications suggest 2010 will bring a surge in litigation involving major corporations. With that surge will come increasing demand for expert witnesses across a range of business-to-business disputes.
Demand for expert witnesses is already growing and will continue throughout the year, a survey of expert witnesses conducted by IMS ExpertServices indicates. Three-quarters of the experts surveyed said their work in 2009 either increased or remained stable. More than half predicted they would have heavier caseloads in 2010 and another third said their workloads would at least remain level.
"We perceive there will be substantial growth in business-to-business litigation in 2010," said the president of IMS ExpertServices, Bill Wein, who closely monitors trends throughout the United States in litigation and use of expert witnesses. "With that growth will come demand for sophisticated and specialized expertise."
A big chunk of the growth in litigation will be seen in those areas that typically pick up when times get tough, Wein said. Call it the see-saw effect: As the economy goes down, litigation goes up in such areas as bankruptcy, contracts and employment.
At the same time, a series of economic catastrophes is driving a dramatic rise in litigation in the financial services sector. From the collapse of the secondary-mortgage market to the discovery of multiple massive Ponzi schemes, this sector will continue to see increasing volumes of litigation for years to come.
Additionally, other areas of litigation that have seen relatively modest growth in recent years are likely to see much greater levels of activity. One such area, said Wein, is intellectual property litigation, which will see continued expansion as businesses take steps to protect and enforce their intellectual-property assets.
Financial Services Litigation
In the financial services sector, new lawsuits will arrive in waves, reflecting the waves of crises the sector experienced in recent years. In fact, some of those waves are already hitting shore, even as others appear on the horizon, Michael Mittleman, regional director of financial services for IMS ExpertServices, observed.
The subprime mortgage crisis propelled the first waves of cases, Mittleman noted. Following them to shore will be cases involving collateralized debt obligations (CDOs) and credit default swaps. Still on the horizon are lawsuits stemming from commercial mortgage-backed securities and from the failures of large numbers of hedge funds.
These cases will continue to drive up demand for expert witnesses with hands-on experience in banking and finance, Mittleman says. "There will be a demand for experts who worked at these firms and who were involved in structuring these transactions."
Also in demand in financial services litigation will be experts with backgrounds in statistics and others with expertise in due diligence and standards of care. "Wall Street created a lot of esoteric securities and financial transactions," Mittleman says. "Lawyers want experts who can explain how and why these were created."
Tracking Other Indicators
These predictions of a litigation surge in 2010 are corroborated by legal industry surveys. One, the annual Litigation Trends Survey published in October by the law firm Fulbright & Jaworski, found that companies were already seeing a litigation wave that corporate counsel expected to swell during 2010.
Forty-two percent of corporate counsel anticipate an increase in the legal disputes their companies will face this year, the Fulbright survey reported. That is up from 34 percent in the prior year. The 2010 increases will follow what was already a busy 2009, with 83 percent of companies having new litigation filed against them and half of major companies seeing increases in their caseloads.
Across the board, businesses report significant increases in litigation in three areas tied directly to the economy: bankruptcy, contracts and employment. They report more modest increases in intellectual property, insurance and regulatory actions.
A major focus of litigation in 2010 will be cases resulting from regulatory investigations and whistleblower allegations, the Fulbright survey predicted. Sixteen percent of all GC – and 23 percent of those in large-cap companies – say they expect an increase in the number of internal investigations their companies face.
One area of litigation unlikely to see a surge in 2010 is class actions. The Fulbright survey reported in 2007 that 51 percent of companies had class actions brought against them. In 2008, that dropped to 23 percent, and it remained at that level in 2009. Although class actions may increase in specific areas in 2010, such as employment, they are unlikely to increase across the board.
Uptick in Legal Spending
Another industry survey that forecasts an uptick in litigation for 2010 is the survey of corporate legal spending conducted by The BTI Consulting Group. Companies will increase their spending on litigation by 2.3 percent this year, resulting in a $13.5 billion market, BTI says.
IP litigation is likely to see the most substantial growth, BTI predicts, if only because patent and trademark cases saw slower growth during the height of the financial crisis, while companies addressed more urgent economic issues.
BTI also predicts a continuing surge in bankruptcy, labor and employment and financial matters. Like Fulbright, BTI predicts decreases in 2010 for class actions and bet-the-company litigation.
"We are seeing a clear turnaround in the economy and an increase in litigation of all types," said Mike Wein, IMS ExpertServices founder and chief executive officer. "From all the indicators we track, 2010 will be a busy year for trial lawyers and experts."
This article was originally published in BullsEye, a newsletter distributed by IMS ExpertServices. IMS ExpertServices is a full service expert witness and litigation consultant search firm, focused exclusively on providing custom expert witness searches to attorneys. We are proud to be the choice of more than 95 of the AmLaw Top 100.
Thursday, January 28, 2010
The Top 10 Expert Rulings of 2009
IMS Bullseye
December 2009
The Top 10 Expert Rulings of 2009
Robert Ambrogi
As 2009 drew close to its end, the Supreme Court turned down an opportunity to decide a case many lawyers believed could set new precedent regarding the admissibility of expert testimony. But earlier in the year, in a key criminal case, the court affirmed the right of a defendant to confront experts who prepare prosecution evidence.
These were just two of the significant appellate rulings involving expert witnesses issued during 2009. A number of federal and state cases through the year shed new light on the admissibility of expert opinions and the procedural formalities surrounding their use.
In this year-end edition of Bullseye, we survey the year's cases and highlight the 10 most important expert rulings of 2009.
10. 'Gatekeeper' must make on-the-record findings.
How much leeway does a trial court have in when and how it decides whether expert testimony is reliable? In a Sept. 21 decision, the 10th Circuit held that a trial court need not hold a separate hearing on an objection to expert testimony and can rule on the objection within the course of a trial.
However, when faced with such an objection, "the district court is required to make specific, on-the-record findings that the testimony is reliable under Daubert."
In this case, the judge erred when he merely stated to the jury that he had determined that the witness was qualified to testify as an expert, without providing any factual findings. "A conclusory statement that the court has made such a determination will not suffice," the court said.
U.S. v. Roach, 582 F.3d 1192 (10th Cir. 2009).
9. Expert's change of mind came too late.
What if an expert files an opinion and then changes his mind? In a wrongful-death appeal decided Dec. 2, the 11th Circuit ruled the change of mind came too late.
The plaintiffs' medical expert first filed his opinion as to the cause of death in advance of the deadline set by the court. Then, three months after the deadline, he filed a second opinion, asserting two new theories of causation.
The trial judge excluded the second opinion as untimely. Plaintiffs appealed, arguing that the expert's second opinion merely clarified his first, timely filed opinion, and therefore should be allowed.
The appellate court upheld the exclusion, finding that the first opinion did not put the defendants on notice of the theories advanced in the second opinion. Thus, the second opinion was not a simple clarification and the trial judge acted within his discretion to exclude it.
Mann v. Taser International Inc., No. 08-16951 (11th Cir. Dec. 2, 2009).
8. Full Daubert hearing unnecessary.
A recurring question regarding expert testimony is whether the trial court must conduct a full Daubert hearing on admissibility. In a case involving fingerprint evidence, the 1st Circuit held that the trial judge could rule on the reliability of the evidence without a full hearing.
Facing drug and firearm charges, the defendant challenged the ACE-V method police used to match the partial fingerprint taken from a firearm to his own fingerprint. He claimed that the method was not scientific and that the finding of a match was based on no discernible standard.
The trial judge admitted the testimony without a Daubert hearing, ruling that "the case law is overwhelmingly in favor of admitting fingerprint experts" and that defendant had provided no strong reason to rule otherwise.
This was not an abuse of discretion, the 1st Circuit held, given that "numerous courts have found expert testimony on fingerprint identification based on the ACE-V method to be sufficiently reliable under Daubert."
U.S. v. Pena, No. 08-1407 ___ F.3d ___ (1st Cir. Nov. 17, 2009).
7. No automatic exemption from sequestration.
Trial lawyers routinely argue that experts should not be included in orders that exclude witnesses from the courtroom. They ground this argument on Federal Evidence Rule 703, which permits an expert to base an opinion on facts or data made known during trial.
But the 7th Circuit ruled that experts are not entitled to any per se exception from sequestration orders. Rather, the party seeking to keep the expert in the courtroom would have to show that the expert's presence is "essential."
"Merely because Rule 703 contemplates that an expert may render an opinion based on facts or data made known at trial does not necessarily mean than an expert witness is exempt from a Rule 615 sequestration order," the court said.
Only two federal circuits had formerly decided this question and both of those decisions were nearly three decades ago. By aligning itself with those earlier rulings, this ruling serves to solidify the rule that experts enjoy no automatic exemption from sequestration.
U.S. v. Olofson, 563 F.3d 652 (7th Cir. 2009).
6. Supreme Court derails 'Qwest' for justice.
An end-of-term hint from the Supreme Court last spring that it might take up an appeal gave renewed significance to an expert witness case decided in February by an en banc 10th Circuit.
Those suspicions were dashed, however, when the court on Oct. 5 denied the petition for certiorari.
The 10th Circuit's ruling affirmed the 2007 conviction of Joseph Nacchio, former Qwest CEO, on federal insider-trading charges. Nacchio is currently serving a six-year sentence in a Pennsylvania prison.
On June 30, the last day of the term, the Supreme Court requested the entire record from Nacchio's earlier trials and appeals. The move seemed to signal that the court would take up Nacchio's appeal when it reconvened in the fall.
Nacchio's appeal asserted that the trial judge had improperly excluded the testimony of an expert. A divided three-judge circuit panel sided with Nacchio. But on review by the full bench, the 10th Circuit held that the judge properly performed his gatekeeping function and it affirmed Nacchio's conviction.
U.S. v. Nacchio, 555 F.3d 1234 (10th Cir. 2009), cert denied, ___ U.S. ___ (Oct. 5, 2009).
5. A scientific process of elimination.
Courts are split on the admissibility of a medical expert's opinion based on "differential diagnosis" – a process of elimination that determines the cause of a patient's symptoms by eliminating all other possible causes.
Even in jurisdictions that have upheld the admissibility of differential diagnosis, there is often uncertainty about when such a diagnosis conforms to the standards of reliability required by Daubert.
Such was the case within the 6th Circuit, where a 2001 decision had indicated that a differential diagnosis could be admitted if it was sufficiently reliable but had failed to provide details on how to determine reliability. Now, the 6th Circuit has provided those missing details.
"A doctor’s differential diagnosis is reliable and admissible where the doctor (1) objectively ascertains, to the extent possible, the nature of the patient’s injury, … (2) 'rules in' one or more causes of the injury using a valid methodology, and (3) engages in 'standard diagnostic techniques by which doctors normally rule out alternative causes' to reach a conclusion as to which cause is most likely."
Best v. Lowe's Home Centers, 563 F.3d 171 (6th Cir. 2009).
4. Maryland OKs '20 percent rule' for experts.
As a tort reform measure in 2004, Maryland's legislature enacted what is known as the "20 percent rule" for medical malpractice cases. The law blocks a doctor from giving expert testimony on the standard of care if providing expert testimony makes up more than 20 percent of the doctor's "professional activities" in a year.
In a Nov. 10 ruling involving a challenge to a retired doctor as an expert witness, the Court of Appeals of Maryland, the state's highest court, upheld this requirement and clarified how courts should compute this percentage.
To do the math, the court had to decide which of the retired doctor's various unpaid pursuits constituted non-testimonial professional activities. It held that his unpaid work performing peer review of medical articles was a professional activity, but that his time spent reading medical journals, observing procedures, and discussing patients with former colleagues – all done in order to keep up with his field – was for his "personal edification" and could not be counted.
University of Maryland Medical System Corporation v. Waldt, No. 130 (Md. Nov. 10, 2009).
3. Delaware affirms standard for expert testimony.
When Delaware's courts speak, corporations around the world listen. That is because so many businesses incorporate there and so many business disputes are litigated there.
Thus, it was significant when the Delaware Supreme Court issued a decision on Aug. 24 that confirmed and clarified the standard courts should apply for the admission of expert testimony.
Because Delaware Rule of Evidence 702 is identical to the federal rule, it held, the case law developed under Daubert and its progeny should govern in the Delaware courts.
Applying the Daubert standards in the appeal of a jury verdict in favor of a former auto mechanic who claimed that dust from brake shoes caused him to develop mesothelioma, the court found no error in the trial court's admission of expert testimony regarding causation.
General Motors Corporation v. Grenier, No. 3464-VCN (Del. Aug. 24, 2009).
2. Bridging the separation of powers.
When Arizona's legislature enacted a law setting minimum qualifications for experts in medical malpractice cases, many observers believed it had crossed the constitutional line of separation of powers. Last year, Arizona's intermediate court of appeals agreed, ruling that the law encroached on the powers of the judiciary.
So when the Arizona Supreme Court reversed the court of appeals and upheld the statute, the precedent was widely seen as important not just in Arizona, but for supporters throughout the United States of legislation to limit tort liability.
The statute limits who may testify as an expert on the issue of standard of care when the defendant is a medical specialist. It requires that the expert have devoted a majority of time in the year preceding the incident to active practice or teaching in the same specialty.
While acknowledging that the statute sets qualifications for experts above those required by its own rule of evidence, the court concluded that the statute was within the legislature's power to set substantive rules governing tort actions.
Seisinger v. Siebel, 203 P.3d 483 (Ariz. 2009).
1. The right to confront an expert.
A Supreme Court opinion is significant not for what it says about the testimony of experts, but for what it says about the lack of such testimony. At issue was a Massachusetts statute that permitted the written results of forensics laboratory analysis to be admitted as evidence without testimony.
At trial, the criminal defendant objected to admission without testimony of a "certificate of analysis" showing that a substance found in his possession was cocaine. The trial judge overruled the objection and the state's appellate courts upheld the judge's decision.
Calling this a "rather straightforward application" of the Confrontation Clause, the Supreme Court, in an opinion written by Justice Antonin Scalia, ruled 6-3 to reverse the conviction.
"The analysts' affidavits were testimonial statements, and the analysts were 'witnesses' for purposes of the Sixth Amendment. Absent a showing that the analysts were unavailable to testify at trial and that petitioner had a prior opportunity to cross-examine them, petitioner was entitled to 'be confronted with' the analysts at trial."
Melendez-Diaz v. Massachusetts, 557 U.S. ___, 129 S.Ct. 2527 (2009).
This article was originally published in BullsEye, a newsletter distributed by IMS ExpertServices. IMS ExpertServices is a full service expert witness and litigation consultant search firm, focused exclusively on providing custom expert witness searches to attorneys. We are proud to be the choice of more than 95 of the AmLaw Top 100.
December 2009
The Top 10 Expert Rulings of 2009
Robert Ambrogi
As 2009 drew close to its end, the Supreme Court turned down an opportunity to decide a case many lawyers believed could set new precedent regarding the admissibility of expert testimony. But earlier in the year, in a key criminal case, the court affirmed the right of a defendant to confront experts who prepare prosecution evidence.
These were just two of the significant appellate rulings involving expert witnesses issued during 2009. A number of federal and state cases through the year shed new light on the admissibility of expert opinions and the procedural formalities surrounding their use.
In this year-end edition of Bullseye, we survey the year's cases and highlight the 10 most important expert rulings of 2009.
10. 'Gatekeeper' must make on-the-record findings.
How much leeway does a trial court have in when and how it decides whether expert testimony is reliable? In a Sept. 21 decision, the 10th Circuit held that a trial court need not hold a separate hearing on an objection to expert testimony and can rule on the objection within the course of a trial.
However, when faced with such an objection, "the district court is required to make specific, on-the-record findings that the testimony is reliable under Daubert."
In this case, the judge erred when he merely stated to the jury that he had determined that the witness was qualified to testify as an expert, without providing any factual findings. "A conclusory statement that the court has made such a determination will not suffice," the court said.
U.S. v. Roach, 582 F.3d 1192 (10th Cir. 2009).
9. Expert's change of mind came too late.
What if an expert files an opinion and then changes his mind? In a wrongful-death appeal decided Dec. 2, the 11th Circuit ruled the change of mind came too late.
The plaintiffs' medical expert first filed his opinion as to the cause of death in advance of the deadline set by the court. Then, three months after the deadline, he filed a second opinion, asserting two new theories of causation.
The trial judge excluded the second opinion as untimely. Plaintiffs appealed, arguing that the expert's second opinion merely clarified his first, timely filed opinion, and therefore should be allowed.
The appellate court upheld the exclusion, finding that the first opinion did not put the defendants on notice of the theories advanced in the second opinion. Thus, the second opinion was not a simple clarification and the trial judge acted within his discretion to exclude it.
Mann v. Taser International Inc., No. 08-16951 (11th Cir. Dec. 2, 2009).
8. Full Daubert hearing unnecessary.
A recurring question regarding expert testimony is whether the trial court must conduct a full Daubert hearing on admissibility. In a case involving fingerprint evidence, the 1st Circuit held that the trial judge could rule on the reliability of the evidence without a full hearing.
Facing drug and firearm charges, the defendant challenged the ACE-V method police used to match the partial fingerprint taken from a firearm to his own fingerprint. He claimed that the method was not scientific and that the finding of a match was based on no discernible standard.
The trial judge admitted the testimony without a Daubert hearing, ruling that "the case law is overwhelmingly in favor of admitting fingerprint experts" and that defendant had provided no strong reason to rule otherwise.
This was not an abuse of discretion, the 1st Circuit held, given that "numerous courts have found expert testimony on fingerprint identification based on the ACE-V method to be sufficiently reliable under Daubert."
U.S. v. Pena, No. 08-1407 ___ F.3d ___ (1st Cir. Nov. 17, 2009).
7. No automatic exemption from sequestration.
Trial lawyers routinely argue that experts should not be included in orders that exclude witnesses from the courtroom. They ground this argument on Federal Evidence Rule 703, which permits an expert to base an opinion on facts or data made known during trial.
But the 7th Circuit ruled that experts are not entitled to any per se exception from sequestration orders. Rather, the party seeking to keep the expert in the courtroom would have to show that the expert's presence is "essential."
"Merely because Rule 703 contemplates that an expert may render an opinion based on facts or data made known at trial does not necessarily mean than an expert witness is exempt from a Rule 615 sequestration order," the court said.
Only two federal circuits had formerly decided this question and both of those decisions were nearly three decades ago. By aligning itself with those earlier rulings, this ruling serves to solidify the rule that experts enjoy no automatic exemption from sequestration.
U.S. v. Olofson, 563 F.3d 652 (7th Cir. 2009).
6. Supreme Court derails 'Qwest' for justice.
An end-of-term hint from the Supreme Court last spring that it might take up an appeal gave renewed significance to an expert witness case decided in February by an en banc 10th Circuit.
Those suspicions were dashed, however, when the court on Oct. 5 denied the petition for certiorari.
The 10th Circuit's ruling affirmed the 2007 conviction of Joseph Nacchio, former Qwest CEO, on federal insider-trading charges. Nacchio is currently serving a six-year sentence in a Pennsylvania prison.
On June 30, the last day of the term, the Supreme Court requested the entire record from Nacchio's earlier trials and appeals. The move seemed to signal that the court would take up Nacchio's appeal when it reconvened in the fall.
Nacchio's appeal asserted that the trial judge had improperly excluded the testimony of an expert. A divided three-judge circuit panel sided with Nacchio. But on review by the full bench, the 10th Circuit held that the judge properly performed his gatekeeping function and it affirmed Nacchio's conviction.
U.S. v. Nacchio, 555 F.3d 1234 (10th Cir. 2009), cert denied, ___ U.S. ___ (Oct. 5, 2009).
5. A scientific process of elimination.
Courts are split on the admissibility of a medical expert's opinion based on "differential diagnosis" – a process of elimination that determines the cause of a patient's symptoms by eliminating all other possible causes.
Even in jurisdictions that have upheld the admissibility of differential diagnosis, there is often uncertainty about when such a diagnosis conforms to the standards of reliability required by Daubert.
Such was the case within the 6th Circuit, where a 2001 decision had indicated that a differential diagnosis could be admitted if it was sufficiently reliable but had failed to provide details on how to determine reliability. Now, the 6th Circuit has provided those missing details.
"A doctor’s differential diagnosis is reliable and admissible where the doctor (1) objectively ascertains, to the extent possible, the nature of the patient’s injury, … (2) 'rules in' one or more causes of the injury using a valid methodology, and (3) engages in 'standard diagnostic techniques by which doctors normally rule out alternative causes' to reach a conclusion as to which cause is most likely."
Best v. Lowe's Home Centers, 563 F.3d 171 (6th Cir. 2009).
4. Maryland OKs '20 percent rule' for experts.
As a tort reform measure in 2004, Maryland's legislature enacted what is known as the "20 percent rule" for medical malpractice cases. The law blocks a doctor from giving expert testimony on the standard of care if providing expert testimony makes up more than 20 percent of the doctor's "professional activities" in a year.
In a Nov. 10 ruling involving a challenge to a retired doctor as an expert witness, the Court of Appeals of Maryland, the state's highest court, upheld this requirement and clarified how courts should compute this percentage.
To do the math, the court had to decide which of the retired doctor's various unpaid pursuits constituted non-testimonial professional activities. It held that his unpaid work performing peer review of medical articles was a professional activity, but that his time spent reading medical journals, observing procedures, and discussing patients with former colleagues – all done in order to keep up with his field – was for his "personal edification" and could not be counted.
University of Maryland Medical System Corporation v. Waldt, No. 130 (Md. Nov. 10, 2009).
3. Delaware affirms standard for expert testimony.
When Delaware's courts speak, corporations around the world listen. That is because so many businesses incorporate there and so many business disputes are litigated there.
Thus, it was significant when the Delaware Supreme Court issued a decision on Aug. 24 that confirmed and clarified the standard courts should apply for the admission of expert testimony.
Because Delaware Rule of Evidence 702 is identical to the federal rule, it held, the case law developed under Daubert and its progeny should govern in the Delaware courts.
Applying the Daubert standards in the appeal of a jury verdict in favor of a former auto mechanic who claimed that dust from brake shoes caused him to develop mesothelioma, the court found no error in the trial court's admission of expert testimony regarding causation.
General Motors Corporation v. Grenier, No. 3464-VCN (Del. Aug. 24, 2009).
2. Bridging the separation of powers.
When Arizona's legislature enacted a law setting minimum qualifications for experts in medical malpractice cases, many observers believed it had crossed the constitutional line of separation of powers. Last year, Arizona's intermediate court of appeals agreed, ruling that the law encroached on the powers of the judiciary.
So when the Arizona Supreme Court reversed the court of appeals and upheld the statute, the precedent was widely seen as important not just in Arizona, but for supporters throughout the United States of legislation to limit tort liability.
The statute limits who may testify as an expert on the issue of standard of care when the defendant is a medical specialist. It requires that the expert have devoted a majority of time in the year preceding the incident to active practice or teaching in the same specialty.
While acknowledging that the statute sets qualifications for experts above those required by its own rule of evidence, the court concluded that the statute was within the legislature's power to set substantive rules governing tort actions.
Seisinger v. Siebel, 203 P.3d 483 (Ariz. 2009).
1. The right to confront an expert.
A Supreme Court opinion is significant not for what it says about the testimony of experts, but for what it says about the lack of such testimony. At issue was a Massachusetts statute that permitted the written results of forensics laboratory analysis to be admitted as evidence without testimony.
At trial, the criminal defendant objected to admission without testimony of a "certificate of analysis" showing that a substance found in his possession was cocaine. The trial judge overruled the objection and the state's appellate courts upheld the judge's decision.
Calling this a "rather straightforward application" of the Confrontation Clause, the Supreme Court, in an opinion written by Justice Antonin Scalia, ruled 6-3 to reverse the conviction.
"The analysts' affidavits were testimonial statements, and the analysts were 'witnesses' for purposes of the Sixth Amendment. Absent a showing that the analysts were unavailable to testify at trial and that petitioner had a prior opportunity to cross-examine them, petitioner was entitled to 'be confronted with' the analysts at trial."
Melendez-Diaz v. Massachusetts, 557 U.S. ___, 129 S.Ct. 2527 (2009).
This article was originally published in BullsEye, a newsletter distributed by IMS ExpertServices. IMS ExpertServices is a full service expert witness and litigation consultant search firm, focused exclusively on providing custom expert witness searches to attorneys. We are proud to be the choice of more than 95 of the AmLaw Top 100.
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