Weight v. Admissibility

ALLIED ERECTING AND DISMANTLING CO., INC., Plaintiff,
v.
UNITED STATES STEEL CORPORTION, Defendant.
Case No. 4:12-cv-1390.
United States District Court, N.D. Ohio, Eastern Division.
April 6, 2015.

This case addresses the testimony of several experts. For purposes of this article, we only discuss the court’s decision regarding the damages expert’s testimony.

As in this case, where the proposed expert testimony is based on specialized knowledge rather than strictly scientific or technical methodology, the court has broad latitude when deciding both how to determine the reliability of such testimony and whether the testimony is sufficiently reliable to be admissible. Notably, in cases involving non-scientific experts, the relevant reliability concerns may focus upon personal knowledge or experience.

The distinction between scientific and non-scientific expert testimony was aptly explained in Berry v. City of Detroit, 25 F.3d 1342, 1349-50 (6th Cir. 1994):

By way of illustration, if one wanted to explain to a jury how a bumblebee is able to fly, an aeronautical engineer might be a helpful witness. Since flight principles have some universality, the expert could apply general principles to the case of the bumblebee. Conceivably, even if he had never seen a bumblebee, he still would be qualified to testify, as long as he was familiar with its component parts.

On the other hand, if one wanted to prove that bumblebees always take off into the wind, a beekeeper with no scientific training at all would be an acceptable expert witness if a proper foundation were laid for his conclusions. The foundation would not relate to his formal training, but to his firsthand observations. In other words, the beekeeper does not know any more about flight principles than the jurors, but he has seen a lot more bumblebees than they have.

Although, the gatekeeping inquiry must be tied to the facts of a particular case, a district court is not required to admit expert testimony that is connected to existing data only by the ipse dixit (unsupported statement) of the expert. A court may conclude that there is simply too great an analytical gap between the data and the opinion proffered. Moreover, a district court will not permit an expert to offer legal opinions or conclusions, or interpret the parties’ contracts.

The Plaintiff (“Allied”) offered Mark Gleason, CPA, as an expert witness on Allied’s damages. Gleason’s opinions are, naturally, based on the assumption that U.S. Steel is liable for each claim.

Gleason calculated Allied’s damages as follows: (1) $1,001,210 in lost profits associated with U.S. Steel’s alleged wrongful use of a replacement contractor to perform concrete removal and basement backfill work; (2) $11,648,613 from U.S. Steel’s alleged disruption of Allied’s dismantling work; (3) $1,913,383 from U.S. Steel’s alleged delay of Allied’s dismantling work; (4) $5,138,759 or $5,601,210, representing alternative theories of damage for U.S. Steel’s alleged conduct for removing certain facilities from Allied’s purported scope of work; (5) $2,883,870 in lost profits associated with the sale of non-ferrous scrap and railroad track; and (6) $772,849 in lost profits for U.S. Steel’s alleged failure to award Allied dismantling contracts for certain railcars and barges.

Defendant argued that Gleason’s opinion regarding Allied’s damages as calculated above in (2) and (3) should be excluded because it rested on unverified factual assumptions that Gleason is unqualified to assess.

First, defendant asserted that Gleason’s calculation for delay damages posits that, but for delays by U.S. Steel, Allied would not have incurred any time-related costs from 2009 through 2013 because Allied would have completed its work within three years of its 2006 commencement. Therefore, Gleason calculated Allied’s delay damages by totaling all time-related costs from 2009 through 2013. Defendant argued that Gleason, an accountant who admits he has never worked on the technical side of a demolition project and that he did not independently do any scheduling analysis, is unqualified to opine whether Allied could have completed the demolition work in three years. His reliance on Allied’s anecdotal assertions about how the demolition might have proceeded and how long it might have taken in the best of all possible worlds was impermissible, in defendant’s view. Defendant further argued that Gleason is not permitted to merely restate the opinions of Allied’s management and employees about Allied’s technical capabilities, scheduling, and demolition methods.

Allied argued that defendant’s challenge goes to the weight of Gleason’s testimony, not its admissibility. Allied asserted that damage experts routinely incorporate factual assumptions and opinions of others into their calculations.

In the Court’s opinion they noted that Allied generally has the better view on the issue raised by defendant. The soundness of the factual underpinnings of the expert’s analysis and the correctness of the expert’s conclusions based on that analysis are factual matters to be determined by the trier of fact. The Court made it clear that U.S. Steel will have the opportunity at trial, on cross-examination, to challenge Gleason’s reliance on facts and data supplied by Allied and to discredit that reliance and the opinions based on it.

The Court concluded that they would allow Gleason’s testimony. Allied had the better view. Defendant’s challenges go to the weight of Gleason’s opinions, not to admissibility.

At Rosenfarb LLC we produce well supported, well-reasoned and well communicated damage calculations that withstand the rigors of litigation. We are a firm of forensic accounting and valuation experts. We understand business, have keen insights and always connect the dots. We understand the litigation process. We frame the issues simply and in alignment with the litigation strategy. We use logic to support our opinions, while creating compelling stories. We are sincere, professional and credible. We are accounting experts with legal acumen.

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