EmploymentExpertWitnessFormer employees sued a food distributor to recover overtime wages under the Fair Labor Standards Act (FLSA).  One of the issues on appeal was the district court’s decision to exclude the employees’ expert report. The appeal court affirmed the decision to exclude the expert report. The case highlights the reasons why an expert report was excluded based on the expert’s attempt to define legal terms.

Plaintiffs were “sales representatives” who were employed by a food distributor, whose management assigned each representative several stores of large chain retailers. At their assigned stores, the employees were responsible for stocking shelves and reordering merchandise. In 2012, Food Distributor discharged a number of the plaintiffs as part of a restructuring. Four of the discharged plaintiffs sued, claiming that Food Distributor failed to pay them overtime wages as required by the FLSA.

The sales representatives stated that they regularly worked in excess of 60 hours a week. However, Food Distributor didn’t pay Plaintiffs overtime because it classified them as exempt from the overtime requirements of the FLSA under the “outside sales employee” exemption. The district court conditionally certified a collective action of sales representatives. After a series of motions, Plaintiffs appealed, and while that interlocutory appeal was pending in the Sixth Circuit, the district court granted Food Distributor summary judgment on the merits of the plaintiffs’ FLSA overtime claims. Plaintiffs then challenged this, as well as the court’s decision to exclude the report of the plaintiffs’ expert witness.

Plaintiffs argued that the district court abused its discretion when it struck the report of their expert witness, whom they termed a “liability expert.” The district court decided that the report “reads as a legal brief” and as a result, ran “afoul of the Sixth Circuit’s guidance in Berry v. City of Detroit (6th Circuit 1994), which permits experts to “opine on and embrace factual issues, not legal ones.”

The circuit judge, who wrote the opinion of the court, explained that review of the district court’s evidentiary rulings were under the abuse-of-discretion standard. Generally, “[r]elevant evidence is admissible.” And expert witnesses may testify in the form of an opinion or otherwise if:

(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and

(d) the expert has reliably applied the principles and methods to the facts of the case.

Expert testimony may also “embrace[ ] an ultimate issue,” but may not, however, “define legal terms,” according to the Berry decision.

The Sixth Circuit concluded that the district court did not abuse its discretion under Daubert v. Merrell Dow Pharmaceuticals (U.S. 1993), when it excluded the report of Plaintiffs’ liability expert. The judge quoted the oft-referenced line from Daubert, which states that Rule 702 of the Federal Rules of Evidence is to allow a district court to perform a “gatekeeping” function with regard to expert testimony. This function isn’t limited only to scientific testimony, and is—at its core—“to decide whether this particular expert had sufficient specialized knowledge to assist the jurors in deciding the particular issues in the case.”

The judge held that the district court was within its discretion to decide the expert’s report here offered no specialized knowledge. The judge described the report’s contents as a recitation of legal principles—inappropriate in expert testimony. In addition, the liability expert’s report contained discussion of interviews with several of Plaintiffs: this content constituted hearsay evidence, admissible only on cross-examination, and which the judge presumed to be cumulative of the witnesses’ eventual first-hand testimony. Absent these portions of the report, the expert had only a cursory analysis of how the plaintiffs spent their working time culled from the interviews. Under these circumstances, there was no abuse of discretion in the district court’s conclusion that the expert’s analysis was not the type of specialized knowledge designed to assist the jury.

In addition, the Sixth Circuit said there was no abuse of discretion by the district court when it determined the liability expert’s report controverted the holding in Berry. Although the report contained permissible conclusions speaking to the ultimate issue, it also had impermissible legal conclusions. For instance, the judge cited the report attempted to define the term “incidental,” and then opined that “[t]he[ non-exempt] work was not incidental to the sales representatives making their own sales.” In similar fashion, the report compared “[t]he specific issues that are explored in this case” with issues “raised to the Administrator during the rule making process for the 2004 revision.” Lastly, the report attempted to characterize the Department of Labor’s view of the regulations defining outside sales.

The Judge saw that these were obvious attempts to define legal terms, and even though the references didn’t constitute the lion’s share of the report, the definitions were enough to support the sound conclusion of the district court. As such, the Court of Appeals held inter alia, that the district court acted within its discretion in excluding the liability expert’s report on ground that report did not offer specialized knowledge and where it attempted to define legal terms.