Plaintiff filed suit against defendant for a claim of fraud. Defendant hired a Forensic Accounting Expert Witness to provide testimony. Plaintiff filed a motion to exclude this expert witness testimony. The court denied the motion.
Facts: This case (United Energy Trading, LLC v. Pacific Gas & Electric Co. et al – United States District Court – Northern District of California – October 16th, 2018) involves a claim of fraud. The plaintiff alleges that the defendants engage in unlawful billing, collection, and payment schemes that misappropriate funds, defraud the plaintiff and unfairly compete for natural gas customers. The defendant has hired Forensic Accounting Expert Witness Daniel Ray to provide testimony on their behalf. The plaintiff has filed a motion to exclude this expert witness testimony.
Discussion: Daniel Ray is a CPA, a Certified Fraud Examiner, and a former FBI agent, with 35 years of experience analyzing accounting records and dealing with fraud-related issues. His testimony details how the defendant’s billing practices function and states that there is no indication of fraud or intent to defraud. The plaintiff argues that Ray’s testimony is unreliable, offers impermissible legal conclusions, and lacks methodology.
The plaintiff argues that Ray’s testimony should be excluded because he merely parrots the defendant’s position without independently verifying the information or analyzing additional documents, such as customer blue bills. The court opines that the plaintiff presents reasons to question or discredit Ray’s opinions, but has not shown that his opinions are methodologically flawed.
The court opines that there is nothing in the record that suggests that Ray rested his valuation on the defendant’s “say so”. The court states that Ray performed his own independent analysis of the data that the defendant provided to him. In addition, the court opines that the plaintiff may disagree with Ray’s decision to limit the scope of his expert analysis, his methodology is not so far-reaching as to warrant excluding his testimony.
The court also opines that Ray provides reasons for limiting his analysis to 35 accounts. The fact that Ray did not review all 120,000 accounts goes to the weight of the evidence, not the admissibility.
The plaintiff also argues that Ray’s opinions contain legal opinions and conclusions that should be inadmissible as a matter of law. In addition, the plaintiff argues that Ray’s opinion contradicts the court’s prior summary judgment order regarding compliance with the Gas Rules, tariffs, or CPUC decisions. The court disagrees, stating that Ray did not use any specialized legal terms to describe the defendant’s compliance with proper billing practices. The court continues by stating that Ray did not substitute his judgment for the jury’s but invokes his professional opinion.
Conclusion: The motion to exclude the expert opinion of Daniel Ray is denied.