Challenging the Unreliable Damages Expert-part I

• Publication year: 2003
• Pages: 119
• Citation: Vol. 32 No. 10 Pg. 119

32 Colo.Law. 119 Colorado Lawyer 2003.

2003, October, Pg. 119. Challenging the Unreliable Damages Expert-Part I

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119

Vol. 32, No. 10, Pg. 119

The Colorado Lawyer
October 2003
Vol. 32, No. 10 [Page 119]

Specialty Law Columns
Young Lawyers Column
Challenging the Unreliable Damages Expert-Part I
by Troy R. Rackham

This column is sponsored by the Young Lawyers Division of the CBA and is designed to provide educational and professional information to younger and newer members of the CBA. The column is published four times per year

Column Editors

Matthew D. Macy and Jake Matter, Denver, of Miller Wood, LLC - (303) 399-5005; mdmacy@millerwoodlaw.com jematter@millerwoodlaw.com

Troy R. Rackham

About The Author:

This month's article was written by Troy R. Rackham, Denver, an associate with the law firm of McConnell Siderius Fleischner Houghtaling & Craigmile, LLC - (303) 480-0400, trackham@ msfhc.com.

This two-part article examines Daubert/Shreck challenges to damages experts. The first part explores when, why, and how to challenge damages experts and economist experts and examines methods to do so. Part II explains the ten most common problems that damages experts make that may result in preclusion of their testimony.

In a civil lawsuit, an injured party is entitled to recover damages to compensate for losses sustained, intended to make the person "whole."1 This may include compensation for past losses in the form of medical expenses,2 lost wages,3 and the amorphous "loss of enjoyment of life."4 In addition, an individual is entitled to damages for future losses, including damages for lost future earnings,5 future medical expenses,6 and lost profits.7 Nevertheless, proving and calculating future damages can be problematic even for experienced practitioners.

The methods for calculating and estimating damages for future losses usually are beyond the ken of ordinary jurors. Consequently, counsel for an injured party seeking to recover for future losses often hire damages experts, such as economists or accountants. A damages expert reviews the facts and renders an opinion regarding the value of the future losses the injured party has suffered. Parties defending against appraisals of loss from damages experts often claim that their opinions are "junk science."

This two-part article explores methods of challenging unreliable damages experts. Part I discusses the trial courts' gatekeeping functions and the general standards courts must use in evaluating whether a proffered expert's testimony should be admitted. Part I also explores the relationship between case law interpreting the admission of expert testimony and the Colorado Rules of Evidence ("C.R.E.") governing the same. Finally, this article discusses considerations a practitioner should take into account when confronting reliability issues involving damages experts or economist experts.

Part II of this article, which will appear in this column in November 2003, moves from the general to the specific. Part II will examine cases that provide insight into challenging damages experts. It also will synthesize ten of the most common flaws in a damages expert's methodology that cause such testimony to be precluded.

Overview of Case Law
And Colorado Rules of
Evidence

A large body of federal jurisprudence flows from the U.S. Supreme Court's decisions in Daubert v. Merrell Dow Pharmaceuticals, Inc.8 and Kumho Tire Co. v. Carmichael.9 Particularly under the guidance of Kumho Tire, federal courts have precluded many damages or economist experts on the grounds that: (1) their methodologies were unreliable; (2) the facts they have assumed are contradicted by the record; (3) the bases for their assumptions were never explained; or (4) the application of their methodologies to the facts in a particular case was flawed.10

Through its decisions in People v. Shreck11 and Brooks v. People,12 the Colorado Supreme Court in large part has adopted the jurisprudence flowing from the U.S. Supreme Court's decisions in Daubert and Kumho Tire. In Shreck, the Colorado Supreme Court emphasized that C.R.E. 702 and 403 should govern a trial court's analysis of whether proffered expert testimony is admissible.13 Nevertheless, the Court noted that trial courts should look to the factors and analyses developed by Daubert14 and its progeny and applied to non-scientific experts by Kumho Tire and its progeny.15

Because the Court in Shreck held that C.R.E. 702 provides the standard for determining the admissibility of expert testimony, that rule should be the starting point for any practitioner challenging a damages expert.16 C.R.E. 702 provides:

If scientific, technical or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise.

As the Court recognized in Shreck, C.R.E. 702 imposes a special obligation on trial courts to serve as gatekeepers, weeding out unreliable expert evidence and allowing only the admission of reliable expert evidence that is helpful to the trier of fact.17 However, to properly fulfill their gatekeeping functions, the Court instructed Colorado courts to look to the factors initially set out by the U.S. Supreme Court in Daubert18 and applied to non-scientific expert testimony in Kumho Tire.19

Similarly, in Brooks, the Colorado Supreme Court, obviously influenced by Kumho Tire,20 applied C.R.E. 702 and Daubert-type factors to expert testimony that was based not on science, but on experience and specialized knowledge.21 Following the Court's announcement of Shreck and Brooks, Colorado appellate courts have applied the Shreck and Brooks analysis several times, both in sustaining the admission of expert evidence and in reversing courts' decisions to admit expert evidence that should have been excluded.22

As a result of Shreck and Brooks, it is clear that Colorado trial courts must exercise their gatekeeping function and evaluate expert opinions under C.R.E. 702 to determine whether: (1) the principles as to which the expert witness is testifying or endorsed to testify are reasonably reliable; (2) the expert witness is qualified to opine on such matters;23 and (3) the expert opinion evidence is relevant.24 The trial court also must engage in a rigorous analysis under C.R.E. 403 to determine whether the probative value of the opinion evidence is substantially outweighed by its danger of prejudice, confusion, or misapprehension.25

However, in evaluating the reliability component of the C.R.E. 702 inquiry, the Colorado Supreme Court emphasized that trial courts should focus on the same considerations enunciated in Daubert and Kumho Tire.26 Based in part on those two cases, the Court provided that a trial court may consider several nonexclusive factors when deciding whether expert testimony is reliable under C.R.E. 702.27 Those factors are:

(1) whether the technique can and has been tested; (2) whether the theory or technique has been subjected to peer review and publication; (3) the scientific technique's known or potential rate of error, and the existence and maintenance of standards controlling the technique's operation; and (4) whether the technique has been generally accepted.28

In cases where the expert testimony is based on specialized or personal experience, rather than science, reliability concerns other than those discussed in Daubert and Shreck are present.29 In such situations, the Daubert/Shreck factors are...