April 11, 2016
Determining who pays for an expert witness’s deposition in federal court can be baffling.
While some jurisdictions, like California, set out specific rules for such matters, the Federal Rules of Civil Procedure (FRCP) are much more vague on this issue.
Accordingly, questions may routinely arise.
This article addresses frequently asked questions regarding payment for expert depositions and apportioning the financial responsibility.
The following FAQs on deposition fees for experts in federal cases are answered below:
1. If an expert is deposed, who pays for the deposition/expert witness fees?
The general rule that attorneys can reference to answer this question can be found in FRCP 26(b)(4)(E). It states that: “Unless manifest injustice would result, the court must require that the party seeking discovery: (i) pay the expert a reasonable fee for time spent in responding to discovery under Rule 26(b)(4)(A) or (D); and (ii) for discovery under (D), also pay the other party a fair portion of the fees and expenses it reasonably incurred in obtaining the expert’s facts and opinions.” Id.
A deposition is considered part of discovery, and so the deposing attorney would ordinarily be responsible for the expert’s fees.
However, this matter is not as fully settled in federal cases as some attorneys would like.
For example, in the Seventh Circuit Court of Appeals, a deposing party argued that FRCP 26(b)(4)(E) was limited, regarding collectible fees, by 28 U.S.C. §1821. Halasa v. ITT Educational Services, Inc., 690 F.3d 844 (7th Cir. 2012).
In the Halasa case, the deposing party asked to be reimbursed for an expert witness’s fees that pertained to the witness’s preparation and travel time and expenses. Id.
Although the Court ultimately found against the deposing party, it admitted that there is little case law or precedent on the matter and that the point is a close one.
Accordingly, although it is fairly standard for the deposing party to pay the expert’s fees, attorneys should confer with their local court rules to ensure that the fee schedule is predictable and calculable in advance.
2. Who pays the expert’s travel expenses?
Generally, this is covered above; reasonable travel expenses are the responsibility of the deposing party. Again, however, the point is a close one, and will be discussed again.
3. Who pays for an expert’s preparation time?
From working on hundreds of federal cases, it is generally the retaining attorney who pays for the expert’s deposition preparation time.
A small majority of jurisdictions have held that the deposing party is financially obligated for these charges, so long as they are reasonable. See Duchess Harris, “Opposing Party Ordered to Pay Expert Witness Fees,” ABA Litigation News, May 14, 2010.
However, some courts have argued that such preparation fees should be less than the charge for the deposition, or that such fees should be somewhat limited. See id. States such as Illinois, California, Wisconsin, and Colorado have “only allowed recovery in limited or extenuating circumstances.” Id.
Ultimately, attorneys must be aware that the issue of preparation time is not standardized on the federal level.
There is a substantial debate on the issue among the various federal jurisdictions. See Ndubizu v. Drexel University, 2011 WL 6046816, (E.D. Pa. 2011).
Much like questions (1) and (2), the answer to who pays for expert preparation fees depends very much on which court is hearing the case.
For example, in multi-district litigation (MDL) in particular asbestos cases, the U.S. District Court for the Eastern District of Pennsylvania has interpreted FRCP 26(b)(4)(E) to mean that: “Pursuant to Rule 26(b)(4)(E), the Court shall require the party or parties seeking to depose an expert witness to pay the expert a reasonable fee for time spent by the expert in connection with his/her participation in the deposition. This shall include time spent preparing for the deposition (not including time spent conferring with counsel), actual time spent in the deposition, and travel time to and from the place where the deposition is conducted.” Magistrate Judge Strawbridge, Deposition Protocol Regarding Tender & Payment of Expert Witnesses in CVLO MDL 875 Cases, (E.D. Pa. Jul. 3, 2012).
Attorneys will need to check with the specific rules in the particular jurisdiction and court in which they will be practicing to ensure that the answers to these questions are as straightforward as possible.
4. Can an expert’s fees differ, based upon which party is paying?
Ordinarily, so long as the fees are considered “reasonable” under the FRCP, the deposing party bears the costs.
However, in one case, a deposing party sued an expert for charging more than the expert charged the attorney who retained the witness.
In that instance, the court ruled that the expert’s fees had to be reduced so that the hourly rate was the same charged to either party. See Harris, supra., citing Borel v. Chevron, U.S.A., Inc., No. 09-2799 (E.D. LA. 2010).
Further, some courts have held that “the goal of Fed. R. Civ. P. 26(b)(4)(C) is to compensate experts for their time, but also ‘to prevent one party from unfairly obtaining the benefit of the opposing party’s expert work free from cost.’” Id.
5. What if an expert witness’s fees are unreasonable?
Fortunately, the FRCP have set up a way to deal with this issue that is relatively straightforward.
FRCP 26(b)(4)(E) sets a standard of reasonability for payment of expert witness fees.
However, in determining what “reasonable” means, attorneys and experts may need to look a little further.
One recent opinion argues that “Where FRCP 26(b)(4)(E) applies, some federal courts deem the expert’s regular hourly rate presumptively reasonable, while most, it seems, consider a number of factors in assessing reasonableness, including (1) the expert’s area of expertise; (2) the education and training required to provide the expert insight that is sought; (3) the prevailing rates for other comparable respected available experts; (4) the nature, quality, and complexity of the discovery responses provided; (5) the cost of living in the particular geographic area; and (6) fees traditionally charged by the expert in unrelated matters.” U.S.A. v. Consumer Financial Protection Bureau, No. 2014-CFPB-0002, (Administrative Proceeding—ALJ, SEC) (Aug. 21, 2014), citing and comparing Burgess v. Fischer, 283 F.R.D. 372, 373 (S.D. Ohio 2012), with Ndubizu v. Drexel Univ., supra at *2, report and recommendation adopted 2011 WL 6058009 (E.D. Pa. Dec. 6, 2011); Barnes v. District of Columbia, 274 F.R.D. 314, 316 (D.D.C. 2011).
The court noted that so far, there is no Supreme Court opinion on the matter to offer guidance.
Further guidance may be provided by Grady v. Jefferson County, which held that “[W]hile a party may contract with any expert it chooses, the court will not automatically tax the opposing party with any unreasonable fees charged by the expert.” Grady v. Jefferson County Bd. of County Com’s, 249 F.R.D. 657, 662 (D. Colo. 2008).
The Grady approach has been followed by the Second, Third, Fifth, Sixth, Ninth, and Tenth Circuit Courts. Theresa W. Parish, “Tips for Dealing with Exorbitant Expert Witness Fees,” American Bar Association Litigation Committee, Sep. 15, 2015.
Typically, if a deposing party feels the expert’s fees are unreasonable, two options are available:
(1). To address those matters with the expert and/or opposing counsel and reach an agreement. (2). To submit a motion to the court to reduce the fees, on the ground of their being unreasonable.
6. What is a reasonable expert witness fee for a deposition?
Again, reasonability is something that is determined (if challenged) by the courts.
However, to get a general idea of what is reasonable, some statistics may assist and guide legal practitioners.
According to one study, the average amount charged by an expert for deposition time in the U.S. is $459/hour.
Attorneys may wish to use this figure as an average so that they don’t challenge an expert’s fees unnecessarily or unsuccessfully and/or incur sanctions under the FRCP. See id.
Attorneys should also note that “An expert’s hourly rate for professional services is presumptively a reasonable hourly rate for deposition.” Barrett v. Nextel Communications, Inc., 2006 U.S. Dist. LEXIS 10262, 2006 WL 374757 (E.D. Mich. 2006).
7. Are there any standards for reasonability?
Again, this question is a challenging one to answer. The short answer is a conditional “yes.”
There are some standards that have been enumerated by courts to determine reasonability (although the FRCP are silent on this issue).
For instance, one court argued that “Several factors may be relevant in determining a reasonable fee for an expert: (1) the witness’s area of expertise; (2) the education and training that is required to provide the expert insight which is sought; (3) the prevailing rates of other comparably respected available experts; (4) the nature, quality and complexity of the discovery responses provided; (5) the fee actually being charged to the party who retained the expert; (6) fees traditionally charged by the expert on related matters; and (7) any other factor likely to be of assistance to the court in balancing the interests implicated by Rule 26.” U.S. Energy Corp. v. Nukem, Inc., 163 F.R.D. 344, 345-46 (D. Colo. 1995).
The Administrative Law Judge in question five also addressed certain criteria for determining reasonability.
Ultimately, attorneys may look to these decisions for guidance but should bear in mind that:
(1). There is no clear, uniform standard for reasonability in the FRCP or from the Supreme Court. (2). Some courts will presume an expert’s fees are reasonable, subject to evidence to the contrary. The courts have the discretion to determine what is reasonable. 8. Can treating physicians charge a fee for a deposition?
As one legal analyst explains,
“there is a debate in federal courts whether treating physicians are permitted to recover expert witness fees or nothing more than the standard $40 subpoenaed witness fee.” ~ Michael Lowry, “Expert Witness Deposition Fees,” Compelling Discovery, Oct. 31, 2016.
In one case, an expert, who was a treating physician, was subpoenaed and able to recover reasonable fees as an expert witness, but the court itself noted that the matter is not clear-cut among the various federal courts. See, e.g., Axelson v. Hartford Insurance Company of Midwest, Case No. 2:11-cv-01827-RCJ-GWF (D. Nev. Mar 26, 2013).
There appears to be a split among the federal courts on this issue, so attorneys should research their jurisdiction carefully and apply the rules that their particular courts follow.
The bottom line is that a fee may be assessed, but the amount of the fee may be in question.
There are a number of issues that arise regarding who pays (and for what) with respect to expert witness deposition fees.
Attorneys should do their research on what their particular jurisdiction’s expectations are and should know that unlike many state courts, the federal statutes and judiciaries are not always clear on these matters.
Stipulations may be the best ways to handle issues of payment and can help protect all parties in ensuring reasonability and appropriate financial responsibility.
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