Recent missteps by companies have shown the importance of qualifying credibility and motives
Civil or criminal cases are oftentimes won or lost on the testimony of the plaintiff or defendant’s expert witnesses. Picking the right expert witness could help a company win a judgment, arrive at a favorable settlement, or it can cost a company millions of dollars. Credible and reliable expert witnesses, however, are harder to find due to the Daubert standard, which governs the admissibility of an expert witnesses’ testimony and is used by the court to decide if a witness is qualified as an expert by knowledge, skill, experience, training or education. Even if an expert witness may appear to pass this standard, it’s imperative that a company conducts a thorough vetting process to truly assess the witnesses expertise, verify his or her credentials, talks to their peers and others in his or her field, check for any conflicting relationships, and understand the tools and methodologies they are applying to come to their conclusions.
Examining a case from earlier this year as reported by the Los Angeles Times¸ Verition, a Greenwich, CT based hedge fund who held a large position in AOL, sued Verizon over their acquisition of AOL. They claimed that AOL was sold for far cheaper than what it was truly worth. Verizon’s expert, Daniel Fischel, valued AOL’s stock at $44.85 a share, as opposed to Verition’s expert, W. Bradford Cornell, who valued the stock at $68.98. Verition ultimately lost $25.2 million on the case when their expert witness’ testimony was thrown out due to questions about his impartiality.
Turns out, Verition’s expert witness, W. Bradford Cornell, originally went to Verizon attempting to become their expert for the same case. Cornell gave testimony to Verizon, claiming that they had the stronger case, and emailed them his data and his opinion showing the Verition’s estimates were not reasonable. Despite this, Verizon chose to use Daniel Fischel, which did not sit well with Cornell. What was not known to Verition, was that Cornell had worked for Compass Lexecon, Daniel Fischel’s company, and records showed that he left Lexecon shortly after Fischel was tapped as Verizon’s expert witness. Conversations and emails between Cornell and Fischel reveal that Cornell held a personal grudge against Fischel in regard to this case, which set him on a course to leave the company, join another, and approach Verition to be their key witness. To mitigate their losses, Verition is now suing Cornell, claiming they were “fraudulently induced” into hiring him as their expert and are seeking to extract $35.7 million Verition claims it lost as a result.
In another recent case, Liberty Mutual won an appeal in the 7th Circuit against Varlen Corp. Varlen, which plated locomotive engine parts in chrome, and refueled diesel engines at its Silvis, Illinois site, discovered groundwater contamination on its property due to a chemical leak and spent millions on cleanup and remediation expenses. They filed a claim with their insurer, Liberty Mutual, seeking compensation for the property damage. However, Liberty Mutual denied their claim, citing a policy exclusion for damage resulting from chemical leaks. During the case, Varlen relied solely on the expert testimony of a geologist, who claimed that the leak was “sudden and accidental,” because the contamination around the refueling area was too large to have occurred by minor leakage, and therefore should have been covered under Liberty Mutual’s policy. However, the expert offered no scientific proof and relied on his personal experience working on similar sites. The judge ultimately awarded summary judgment to Liberty Mutual, citing the expert’s testimony as purely speculative, and did not meet the Daubert standard.
These cases illustrate a clear gap in the vetting process when it comes to identifying expert witnesses, and how choosing the wrong expert witness cost these companies millions of dollars. In Verition’s case, a more enhanced due diligence process could have revealed Cornell’s affiliations, reasons for leaving his former company, and personal motivations for becoming an expert witness in the trial. Varlen on the other hand lost their trial by relying upon only one expert witness who made speculative conclusions, not based upon his scientific background, but by his personal experiences. A similar due diligence exercise could have looked into the expert’s background and methodologies he used to come to his conclusions, to assess the veracity of his claims.
In both these cases, the plaintiffs would have been well-served to consult with outside investigative experts to vet both their witnesses. At Gryphon Strategies, we seek to assist both corporate and law firm clients in the vetting of expert witnesses. We aim to go well beyond a standard background check:
- Determine whether the motives of the expert are conflicted by their occupation, as well as their corresponding or personal relationships to the plaintiff/defendant.
- Provide insight from related parties that have interacted with the witness in other cases.
- Stress test the credibility and reputation of the witness prior to scrutiny and possible exposure by opposing counsel.
For more information on Gryphon’s enhanced due diligence services, please contact Rich Finley.