Mathematical Sciences Expert Witness Testimony Allowed

Plaintiffs sued defendant for breach of duty of loyalty related to Plans under the Employee Retirement Income Security Act of 1974.  The plaintiffs hired a Mathematical Sciences Expert Witness to provide expert witness testimony.  The defendants filed a motion to exclude the testimony of this witness, which was denied by the court.

Facts:  This case (Wildman et al v. American Century Services, LLC et al – United States District Court – Western District of Missouri – May 22, 2018) involves a claim under the Employee Retirement Income Security Act of 1974 (ERISA).  The plaintiffs, former employees of the defendants, allege that the defendants breached their duties of loyalty and caused the retirement plan to pay excessive fees.  The plaintiffs also allege that the defendants maintained a list of investment options that consisted only of proprietary funds owned by the defendants.  These funds underperformed when compared to other funds in the marketplace and charged higher fees.  The plaintiffs hired Dr. Steve Pomerantz (Mathematical Sciences Expert Witness) to provide expert witness testimony, to which the defendants filed a motion to exclude25

Discussion:  Dr. Pomerantz’s qualifications include 30 years working in the investment field working as a portfolio manager and providing investment management services.  In addition, he has testified in numerous 401(k) cases on the topic of sensible investment processes.  First, Dr. Pomerantz opined on the Committee’s management of the central investment lineup, which includes the Plan’s exclusive use of proprietary funds.  Second, he presented four models showing how alternative plan menus would have performed relative to this plans actual performance..  Last, he calculated other components of the Plan’s damages.

The defendants argues that 1) Dr. Pomerantz is not qualified to provide testimony in this case; 2) His calculations of damages do not match up with his theories; and 3) his damages models are based on methodology that is not reliable and is not supported by the record.

The court first opines that Dr. Pomerantz is qualified to testify in this case related to fiduciary matters, which includes selecting and monitoring investment options.  The court concludes this based on his education and experience.

Regarding the defendant’s arguments that the damages models do not track the theory of the breach, the plaintiffs reply that each model is drafted to correct certain aspects of the Plan’s failures to assist the court in figuring out damages.  The court agrees, stating that the damage models sufficiently relate to the theories of breach.  In addition, the court opines that all other arguments go to the weight of the evidence and not the admissibility.

Conclusion:  The motion to exclude the expert witness testimony of Dr. Steve Pomerantz is denied.