Ascom Hasler Mailing Systems, Inc. v. United States Postal Service , 267 F.R.D. 9 ( 2010 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
ASCOM HASLER MAILING
SYSTEMS, INC.,
Plaintiff, Civil Action No. 00-1401 (PLF/JMF)
v.
UNITED STATES POSTAL SERVICE,
Defendant.
NEOPOST, INC.,
Plaintiff,
Civil Action No. 00-2089 (PLF/JMF)
v.
UNITED STATES POSTAL SERVICE,
Defendant.
MEMORANDUM OPINION
These cases have been referred to me by Judge Friedman for full case management.
Pending before me is Defendant’s Motion to Strike Plaintiff’s Expert Designation and to Enlarge
Time for Defendant to Identify Its Expert [#106]1 (“Def. Mot.”). For the reasons stated herein, I
will deny defendant’s motion to strike plaintiffs’ expert designation, but grant its motion for an
enlargement of time for defendant to identify its expert.
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I will refer only to the docket entry numbers for the lead case in this consolidated
action, Neopost, Inc., v. U.S. Postal Serv., No. 00-CV-2089, as the docket entry of October 04,
2006 indicates that all filings should be made under the lead case.
I. Background
Defendant filed this motion claiming that plaintiffs’ expert, Dr. Bruce D. Abramson,
should be disqualified “because of [a] conflict of interest created by his prior work on litigation
that is significantly related to the present matter,” because during his deposition, it was revealed
that he had worked for Pitney Bowes in its litigation against the defendant. Ascom Hasler
Mailing Systems, Inc. v. U.S. Postal Service, No. 00-CV-1401; 00-CV-2089, __ F.R.D. __, 2010
WL 143709, at *4 (D.D.C. Jan. 14, 2010). Dr. Abramson had worked on the consultant team
that produced the expert report for Pitney Bowes that was used in the litigation and confidential
mediation; however, he was not Pitney Bowes’s principal expert. Id. Defendant sought to strike
Dr. Abramson because there was a high probability that he had seen the confidential report and
information that Pitney Bowes submitted during its mediation with defendant. Id. I set an
evidentiary hearing on the motion to determine what confidential information related to the
Pitney Bowes mediation, if any, was made available to Dr. Abramson by defendant because of
his participation in the preparation of the Pitney Bowes expert report. Id.
II. Findings of Fact
From the testimony at the hearing, I make the following findings of fact:
1. Dr. Abramson is a consultant and operates his own consulting firm, which then
coordinates with larger consulting firms, such as Charles River Associates.
2. Dr. Abramson has been a senior consultant at Charles River Associates
(hereinafter referred to as “CRA,” recognizing the organization’s name has
changed several times over the last decade) since late 2004. He began at CRA as
a consultant in 1998, then became a principal, before becoming a senior
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consultant.
3. Dr. Abramson often works on cases that require economic modeling, as this one
does, where he determines the value of the income stream from a diverted
financial asset. In preparing his report for this case, he reviewed only documents
provided by plaintiffs’ counsel, all of which contained Bates numbers.
4. In or around 1998 or 1999, Dr. Abramson also served as part of an expert
consulting team on behalf of Pitney Bowes during its ligation with defendant
based on similarly diverted asset streams. He was not the principal expert for
Pitney Bowes; Dr. Overstreet from CRA was hired as the expert. As part of the
team, he coordinated the analysis of the financial stream of possible income from
a similar fund that is not at issue in this case. He did not use any of the
information from the analysis he did for Pitney Bowes for the analysis he did in
this case, for they are fundamentally different. To the best of his recollection, Dr.
Abramson does not remember reviewing confidential information from defendant
in completing his work. Further, to the best of his knowledge, he did not
participate in any manner in the mediation between parties in that case, nor did he
prepare materials for the mediation.
5. Dr. Abramson notes that, if the defendant had submitted a report in the Pitney
Bowes litigation, it would have been standard practice for him to review it, but he
has no recollection of reading or analyzing it. Because the case settled, it is
possible that the CRA consultants never saw the report or never analyzed it.
6. Dr. Abramson has no recollection of seeing the expert report commissioned by
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the Court for the purpose of mediation in the Pitney Bowes litigation. If he had
reviewed that report or the defendant’s report, he did not delve into the
methodology in any appreciable way that he can recall.
7. To the best of his knowledge, Dr. Abramson does not have a copy of Dr.
Overstreet’s report from the Pitney Bowes litigation in his files, nor does he have
any copies of information from the report that might be confidential. He did note
that he may have some fragments of methodologies saved on his computer that
may have been included in the report. He frequently uses a general template for
methodologies he includes in reports that he refers to as “the Janis Joplin’s
yearbook methodology,” because it provides a simple way to understand the
modeling methods used.
8. Dr. Overstreet, the principal expert for Pitney Bowes in its prior litigation with
defendant, is a Vice President for CRA, which is similar to the rank of equity
partner in a law firm. Dr. Overstreet referred plaintiff to Dr. Abramson. Dr.
Overstreet spoke in general terms to Dr. Abramson on several occasions
regarding the expert report for this case and reviewed Dr. Abramson’s report
draft.
9. In discussing the expert report with plaintiffs’ counsel, Dr. Abramson mentioned
that the Pitney Bowes report had a future analysis, but that such an analysis would
not be necessary in this case. The expert report would include an analysis of past
damages, utilizing a standard methodology.
10. To the best of Dr. Abramson’s knowledge, CRA conducted a conflict of interest
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check on retaining plaintiffs as clients. No conflicts were found. Further, Dr.
Abramson’s own firm, Informationism, Inc., considers whether the interests of a
potential client are adverse to a former or current client. No such adverse interest
was found.
12. To Dr. Abramson’s knowledge, the expert report in Pitney Bowes was turned
over to defendant in the course of discovery and was developed primarily as a
litigation report. Dr. Abramson does not know what, role, if any, the report
played in mediation.
III. Legal Standard
The District of Columbia Circuit Court of Appeals has not addressed the issue of
disqualification of an expert due to an alleged prior relationship with the opposing party and
there is little case law otherwise. See Hansen v. Umtech Industrieservice Und Spedition, GmbH,
No. 95-CV-516, 1996 WL 622557, at *3 (D.Del. Jul. 3,1996) (noting lack of case law on
disqualification of expert because of prior relationship with party seeking disqualification). In
one case, the district court broke down the typical scenarios from which motions to disqualify
experts typically arise into two categories: (1) “side-switching” cases, “where one expert is
originally retained by one party to litigation, and that expert subsequently switches sides to
consult as an expert for that party’s adversary,” and (2) cases “where an expert is retained by a
party to litigation, and then the adversary retains an expert who is in some way affiliated with the
expert retained by the first party.” See Hansen, 1996 WL 622557, at *3. Neither of these
categories apply to the case at hand. There is said to be, however, a two-part test for determining
whether to disqualify an expert on the ground of a prior relationship with the party seeking
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disqualification. The test requires the court to undertake the following inquiries:
(1) “[W]as it objectively reasonable for the first party...to
conclude that a confidential relationship existed?”
(2) “[W]as any confidential or privileged information
disclosed by the first party to the [expert]?”
Koch Refining Co. v. Jennifer L. Boudreaux MV, 85 F.3d 1178, 1181 (5th Cir. 1996) (citing
Mayer v. Dell, 139 F.R.D. 1, 3 (D.D.C. 1991) (reviewing cases)).
Only when the answer to both of these questions is affirmative is disqualification
compelled. Id. at 1181 (citing Mayer, 139 F.R.D. at 3). Further, the party seeking
disqualification bears the burden of establishing both the existence of privilege, in regards to the
information disclosed, and its non-waiver. Id. (citing Nikkal Industries, Ltd. v. Salton, Inc., 689
F. Supp. 187, 191 (S.D.N.Y. 1988)).
IV. Analysis
A. Nature of the Relationship Between Dr. Abramson and Defendant
According to defendant, Dr. Abramson is subject to the confidentiality requirements
provided in Local Rule 84.9(a)(1) and (3), which would prevent Dr. Abramson from disclosing
any written or oral communications made in connection with or during any mediation session or
using any information acquired through mediation for any purpose. See LCvR 84.9(a)(1), (3).
In light of the local rules and the traditional practices of lawyers during settlement
discussions, it was reasonable for the Postal Service to believe that information it made available
to its opponent, Pitney Bowes, solely for the purpose of mediation would be kept confidential
and be used only for the purposes of that mediation. Unfortunately, for the Postal Service, there
is no evidence whatsoever that Dr. Abramson used any of the information disclosed by Pitney
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Bowes for the purposes of the mediation for the report that he has prepared for this case. Indeed,
as I explained at the hearing, I presided over those discussions and I can assure the parties
without breaching the confidentiality of those discussions that the analyses used in the mediation
looked to the future while Dr. Abramson’s looked to the past. It is inconceivable that any thing
he did in the Pitney Bowes case could have influenced his work in this case.
B. Policy Interests in Expert Disqualification
The Court must also consider the competing policy objectives in determining an expert’s
disqualification. See, e.g., English Feedlot, Inc. v. Norden Laboratories, Inc., 833 F. Supp. 1498,
1504-05 (D.Colo. 1993) (citing Paul v. Rawlings, 123 F.R.D. 271, 282 (S.D.Ohio 1988)). On
the one hand, the policy objectives of preventing conflicts of interest and maintaining the
integrity of the judicial process favor disqualification. Paul, 123 F.R.D. at 277-278. On the other
hand, ensuring that experts who possess specialized knowledge can pursue their professional
calling and that they are accessible to parties represents a strong policy objective against
disqualification. English Feedlot, Inc., 833 F.Supp at 1505 (citing Palmer v. Ozbek, 144 F.R.D.
66, 67 (D.Md.1992)). Further, should disqualification of experts become too easy, courts
express concern that unscrupulous attorneys and clients may create inexpensive confidential
relationships with experts to prevent opposing counsel from hiring harmful experts. Id. (citing
Paul, 123 F.R.D. at 281-82). In addition, unique to this case, is the policy interest in maintaining
the integrity of confidential mediation proceedings.
In this case, Dr. Abramson served as an associate consultant for an expert witness hired
by a third party not party to this current litigation. I have found, based on his testimony, that Dr.
Abramson has not disclosed any confidential information gained from his employment on the
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expert team for Pitney Bowes. As there has been no disclosure, Dr. Abramson’s participation in
this current litigation as an expert witness does not jeopardize the integrity of the judicial
process, nor does it present a conflict of interest. Further, disqualification in this case would
severely impede Dr. Abramson, and many other consultants, from pursuing their professional
calling, if expert witnesses faced disqualification merely for serving as an assistant to an expert
witness in a case 10 years prior which involved one party to the current litigation. Lastly,
disqualification would further delay the progress of this decade-old case, a harsh sanction in no
way proportional to the alleged misconduct of plaintiffs. See, e.g., Bonds v. District of
Columbia, 93 F.3d 801, 811 (D.C. Cir. 1996).
C. Conclusion
I will deny defendant’s motion to strike; however, I do want to address some of
defendant’s concerns about Dr. Abramson’s continued participation. Defendant is preoccupied
with concerns that it will not be able to fully cross-examine the expert, because he will be bound
to keep certain information confidential and will not be able to answer all questions about his
knowledge and analysis. Reply to Plaintiffs’ Opposition to Defendant’s Motion to Strike
Plaintiffs’ Expert Designation, and to Enlarge Time for Defendant to Identify Its Expert [#117]
(“Def. Reply”) at 7. Defendant does not have any evidence that this will be true; it just assumes,
based on Dr. Abramson’s experience on the Pitney Bowes litigation ten years prior, that his
knowledge and analysis will be based on confidential information disclosed in settlement
negotiations related to that case. Dr. Abramson’s testimony at the hearing negates that
assumption. Defendant is further concerned that cross-examining Dr. Abramson about his
participation in the Pitney Bowes litigation could be construed by plaintiffs as subject-matter
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waiver, allowing plaintiffs to seek discovery of the confidential settlement discussions, or
considered a violation by the Postal Service’s counsel of Local Rule 84.9. Thus, I will order
that, in the unlikely event that confidential or privileged information is inadvertently disclosed
during the cross-examination of Dr. Abramson, such disclosure shall not constitute a waiver nor
will it constitute a violation of Local Civil Rule 84.9.
Plaintiffs have requested costs, should defendant’s motion be denied. I will not award
costs, as defendant made a legitimate objection to plaintiffs’ expert.
V. Motion for Enlargement of Time
Defendant also seeks an enlargement of time to identify its expert until the Court rules on
its motion to strike plaintiffs’ expert. See Def. Mot. 1-2. Defendant argues that the Federal
Rules of Civil Procedure do not require defendant to identify its rebuttal expert until after the
plaintiff has identified its expert. Def. Mem. 3 (citing Fed. R. Civ. P. 26(a)(2)(C)(ii)). Plaintiffs
argue that the motion was filed after the close of discovery and that defendant has been dilatory
in making objections to plaintiffs’ expert. Plaintiffs’ Memorandum in Opposition to Defendant’s
Motion to Strike Plaintiffs’ Expert Designation, and to Enlarge Time for Defendant to Identify
Its Expert [#147] (“Pls. Opp.”) at 6-7. Federal Rule of Civil Procedure 6(b)(1) allows for such
an enlargement for good cause, if the request is made before the original time or its extension
expires. Fed. R. Civ. P. 6(b)(1)(A). Although the motion was filed after discovery had closed in
the action, plaintiffs concede that they had granted defendant an extension through mid-August
to identify an expert. Pls. Opp. 7. Defendant filed this current motion on August 13, 2009,
before this extension had expired. I will grant defendant an enlargement of time to identify its
expert. Defendant will have 10 days from the date of this order to identify its expert. This is not
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an unreasonable amount of time, given that I have denied its order to strike plaintiffs’ expert, and
thus, defendant is faced with the same expert. Presumably, defendant has already conducted
much of the groundwork necessary to identify a rebuttal expert to Dr. Abramson.
Digitally signed by John
M. Facciola
Date: 2010.03.25
13:50:08 -04'00'
__________________________________
JOHN M. FACCIOLA
UNITED STATES MAGISTRATE JUDGE
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