Forensic Accounting and Economics Expert Witness Testimony Partially Allowed

Plaintiff sued defendants for moving to a competitive business and taking customers.  Both parties hired experts to help in their cases and both parties filed motions to exclude.  The court granted in part and denied in part both motion.

Facts:  This case (Porters Building Centers, Inc. v. Sprint Lumber, Inc. et al – United States District Court – Western District of Missouri – October 2nd, 2017) involves employees who worked for the plaintiff (Porters) moving to work for the defendant (Spirit).  Porters filed a lawsuit against their former employees and Spirit and moves for a temporary restraining order.  This motion was denied.  Porters hired Steve Browne (forensic accounting expert witness) to provide testimony in this case and Spirit hired  John Ward, Ph.D (economics expert witness) Both parties filed motions to exclude based on Daubert.

Discussion:  Browne is a CPA, a fraud examiner, and a financial analyst and has degrees in accounting, finance, and economics.  Browne intends to opine on damages caused by the Spirit.  His opinions were based on his experience and knowledge as well as documents reviewed, Spirit’s point of sale databases, the briefing on the preliminary injunction and the expert report produced by Spirit’s expert.  The Defendants allege that Browne’s expert opinion should be excluded because causation opinions are a matter of law.  In addition, they argue that Browne is not an expert on what former employees may do regarding former customers.

The court opined that Browne is qualified to opine on the damages caused by the Defendants.  In addition, the court opined that Browne’s opinions will assist the trier of fact.  That said, the court also opined that Browne will not be allowed to provide testimony on what employees can or cannot do legally.  The court concluded that experts cannot instruct the jury on legal issues and principles.

In addition, the defendants argue that Browne’s testimony is not based on sufficient facts or data.  They argue that Browne’s opinion contradicts affidavits by former customers and is speculative and unsupported.   The court disagreed, stating that his opinions are not fundamentally unsupported.

Porters argued that Dr. Ward’s testimony should be excluded because he only determined one basis for liability which could result in damages.  In addition, they argue that Dr. Ward’s opinions on employee and customer conduct are legal conclusions.  The court concluded that Dr. Ward will be allowed to opine on why the Plaintiff has not suffered damages but will not be allowed to testify about employee and customer conduct as that relates to legal issues.  In addition, the court also opined that Dr. Ward is excluded from testifying about customers moving with a salesperson to a new job as this is common sense.

Conclusion:  The motions to exclude the expert witness testimony of  Steve Browne and John Ward, Ph.D are granted in part and denied in part.