Plaintiffs owned a jewelry business from the mid-1990s until 2009 when the company was dissolved and the store closed. The state received an anonymous tip from someone identifying themselves as an employee of the jewelry business, who indicated that the company was “committing fraud, the owners are hiding sales, cash sales are not reported, cost of jewelry will show large purchases and no sales for the same jewelry, this is in the millions of dollars hidden from the state in sales.” Following a tax audit of the business, a civil enforcement action ensued as well as criminal proceedings against Plaintiffs.
As a part of the on-going litigation, U.S. District Judge Tanya Walton Pratt heard a motion from Plaintiffs objecting to Defendant’s expert to counter Plaintiffs’ damages expert witness. Citing Seventh Circuit precedent, the judge explained that to be admissible, expert testimony must be both relevant and reliable. Courts will consider whether: (1) the witness is qualified as an expert by knowledge, skill, experience, training, or education; (2) the expert’s reasoning or methodology underlying the testimony is scientifically reliable; and (3) the testimony assists the trier of fact to understand the evidence or to determine a fact in issue.
Here, Plaintiffs’ primary argument was that Defendant’s expert’s testimony consisted of legal conclusions, and expert witnesses are prohibited from providing testimony regarding legal conclusions. Plaintiffs also argued that Defendant’s expert’s testimony was self-contradictory and therefore unreliable.
Defendant responded that his expert’s testimony didn’t consist of legal conclusions, pointing out that some of his deposition testimony simply showed his understanding of various legal standards. His deposition testimony regarding his understanding of legal standards didn’t convert his expert testimony about damages into an expert opinion with legal conclusions. Defendant also argued that his expert’s testimony wasn’t self-contradictory and that Plaintiffs’ attempt to show contradictions was based on selective quotations and taking testimony out of context.
Judge Pratt reviewed the briefing and exhibits for the Motion to Exclude and held that Defendant’s expert’s anticipated testimony didn’t consist of impermissible legal conclusions, appeared to be reliable, and was relevant to the issue of damages. She noted that Defendant’s expert had the training, education, and experience to serve as an expert witness in this matter regarding damages. His opinions appeared to be limited to a review and analysis of the expert opinion of Plaintiffs’ damages expert witness.
Citing Daubert, the judge found that the concerns raised by Plaintiffs were each adequately addressed by “the traditional and appropriate means of attacking shaky but admissible evidence,” which are “[v]igorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof.”
The Court denied Plaintiffs’ Motion to Exclude Opinions of Defendant’s expert.