Nacchio: A Must-Read Case Concerning Expert Testimony
US v. Nacchio, 2009 WL 455666 (10th Cir. Feb. 25, 2009) (en banc) (on rehearing 535 F.3d 1165 (10th Cir. 2008):
Holmes, Tacha, Briscoe, Lucero and Hartz in the majority:
If you are seeking to have expert testimony admitted or excluded, this is a must-read decision. And if you think this summary is long, check out the full decision!
http://ca10.washburnlaw.edu/cases/2009/02/07-1311.pdf
The former CEO of Qwest was convicted of multiple counts of insider trading. He appealed his conviction, his sentence, and the forfeiture of his assets. A divided panel held the evidence was sufficient to support the conviction, but that expert testimony had been improperly excluded. It did not reach the sentencing or forfeiture issues. The case was remanded for a new trial. The Tenth granted rehearing on the expert testimony issue, and held the expert testimony was properly excluded.
Jury trial commenced after more than a year of motions and discovery, during which Mr. Nacchio did not disclose any experts. Three days before trial, on March 16, he disclosed he intended to call Prof. Fischel as an expert, pursuant to Fed.R.Crim.P. 16. Mr. Nacchio also provided the government with a short summary of the professor's testimony and his C.V. The government objected that the disclosure was not complete and did not comply with Rule 16 nor with Fed.R.Evid. 401, 403, 602, 702 and 704. The district court agreed and ordered the defendant to produce an expert disclosure that complied with the Federal Rules "described herein" by March 26. There were lengthy motions, a hearing, and argument. The defendant received permission to put the professor on the stand as a nonexpert, but the district court excluded his testimony as an expert.
1. The majority rejects the defendant's argument that the district court erroneously relied on Rule 16. Instead, the court says, it is clear that the final basis for exclusion was the district court's determination that the professor's testimony lacked reliability under FRE 702 and Daubert.
2. Defendant contended that he had a right to expect to be able to establish the reliability of the expert's testimony on the witness stand and that the court would allow voir dire or questioning of the witness before ruling on admissibility. No, no, says the Court. That expectation may have been reasonable in light of case law, but the district court was not required to follow that procedure and its failure to do so did not, by itself, constitute an abuse of discretion. Furthermore, Mr. Nacchio was on notice of the need to establish reliability because the government had mentioned FRE 702 in its first objection to the Rule 16 disclosure, and the subsequent briefing demonstrated that the parties knew Daubert was at issue. In Footnote 13, the majority observes that, after Mr. Nacchio had actually responded to the Daubert issue, "at this point Mr. Nacchio's decision to steadfastly continue to view the government's attack on Professor Fischel's expert testimony solely as it was initially framed-that is, only through the lens of Rule 16-became both unwise and perilous." He also had the opportunity to present evidence in support of the professor's methodology or to request a hearing or continuance, both continually and on several different occasions. As the party proffering the expert testimony, the burden was squarely on Mr. Nacchio to request a hearing on the subject.
3. The ultimate issue is whether the district court abused its discretion, and the majority holds it did not.
This case could provide ammunition for seeking to exclude law enforcement officers' "expert" testimony. The Court says:
"An expert witness's testimony can rely solely on experience. When that is the case, however, 'the witness must explain how that experience leads to the conclusion reached, why that experience is a sufficient basis for the opinion, and how that experience is reliably applied to the facts.' Fed.R.Evid. 702 advisory committee's note (2000). Mr. Nacchio did not offer any of this additional information. 'The trial court's gatekeeping function requires more than simply ‘taking the expert's word for it.' ' Id. '[N]othing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence that is connected to existing data only by the ipse dixit of the expert.' Joiner, 522 U.S. at 146."
The case was remanded to the original panel to consider the sentencing and forfeiture issues.
Judges McConnell, Henry, Kelly and Murphy dissented. Notably, they would have found that the defendant did have the right to establish the reliability of his expert through testimony and, if the trial court intended a different procedure, it had to inform the parties. Furthermore, even if counsel had made a mistake, the trial court abused its discretion by refusing to allow the primary line of defense.
Holmes, Tacha, Briscoe, Lucero and Hartz in the majority:
If you are seeking to have expert testimony admitted or excluded, this is a must-read decision. And if you think this summary is long, check out the full decision!
http://ca10.washburnlaw.edu/cases/2009/02/07-1311.pdf
The former CEO of Qwest was convicted of multiple counts of insider trading. He appealed his conviction, his sentence, and the forfeiture of his assets. A divided panel held the evidence was sufficient to support the conviction, but that expert testimony had been improperly excluded. It did not reach the sentencing or forfeiture issues. The case was remanded for a new trial. The Tenth granted rehearing on the expert testimony issue, and held the expert testimony was properly excluded.
Jury trial commenced after more than a year of motions and discovery, during which Mr. Nacchio did not disclose any experts. Three days before trial, on March 16, he disclosed he intended to call Prof. Fischel as an expert, pursuant to Fed.R.Crim.P. 16. Mr. Nacchio also provided the government with a short summary of the professor's testimony and his C.V. The government objected that the disclosure was not complete and did not comply with Rule 16 nor with Fed.R.Evid. 401, 403, 602, 702 and 704. The district court agreed and ordered the defendant to produce an expert disclosure that complied with the Federal Rules "described herein" by March 26. There were lengthy motions, a hearing, and argument. The defendant received permission to put the professor on the stand as a nonexpert, but the district court excluded his testimony as an expert.
1. The majority rejects the defendant's argument that the district court erroneously relied on Rule 16. Instead, the court says, it is clear that the final basis for exclusion was the district court's determination that the professor's testimony lacked reliability under FRE 702 and Daubert.
2. Defendant contended that he had a right to expect to be able to establish the reliability of the expert's testimony on the witness stand and that the court would allow voir dire or questioning of the witness before ruling on admissibility. No, no, says the Court. That expectation may have been reasonable in light of case law, but the district court was not required to follow that procedure and its failure to do so did not, by itself, constitute an abuse of discretion. Furthermore, Mr. Nacchio was on notice of the need to establish reliability because the government had mentioned FRE 702 in its first objection to the Rule 16 disclosure, and the subsequent briefing demonstrated that the parties knew Daubert was at issue. In Footnote 13, the majority observes that, after Mr. Nacchio had actually responded to the Daubert issue, "at this point Mr. Nacchio's decision to steadfastly continue to view the government's attack on Professor Fischel's expert testimony solely as it was initially framed-that is, only through the lens of Rule 16-became both unwise and perilous." He also had the opportunity to present evidence in support of the professor's methodology or to request a hearing or continuance, both continually and on several different occasions. As the party proffering the expert testimony, the burden was squarely on Mr. Nacchio to request a hearing on the subject.
3. The ultimate issue is whether the district court abused its discretion, and the majority holds it did not.
This case could provide ammunition for seeking to exclude law enforcement officers' "expert" testimony. The Court says:
"An expert witness's testimony can rely solely on experience. When that is the case, however, 'the witness must explain how that experience leads to the conclusion reached, why that experience is a sufficient basis for the opinion, and how that experience is reliably applied to the facts.' Fed.R.Evid. 702 advisory committee's note (2000). Mr. Nacchio did not offer any of this additional information. 'The trial court's gatekeeping function requires more than simply ‘taking the expert's word for it.' ' Id. '[N]othing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence that is connected to existing data only by the ipse dixit of the expert.' Joiner, 522 U.S. at 146."
The case was remanded to the original panel to consider the sentencing and forfeiture issues.
Judges McConnell, Henry, Kelly and Murphy dissented. Notably, they would have found that the defendant did have the right to establish the reliability of his expert through testimony and, if the trial court intended a different procedure, it had to inform the parties. Furthermore, even if counsel had made a mistake, the trial court abused its discretion by refusing to allow the primary line of defense.
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