Tenth Circuit Strictly Applies Expert Disclosure Rule Against Defendant
A lengthy ruling and opinion from an en banc Tenth Circuit upheld the insider trading conviction of Joseph Nacchio, the former CEO of Qwest Communications, and further held that the trial judge properly excluded a defense expert’s opinion testimony under FRE 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). United States v. Joseph P. Nacchio¸ Docket No. 07-1311 (Feb. 25, 2009). The ruling and opinion overruled a prior panel opinion, and reinstated Nacchio’s conviction.
The defense disclosed the expert three days before trial and provided the government with his C.V. and a summary of his testimony. Because the disclosure did not contain the basis for the expert’s opinions as required by Criminal Rule 16, the trial judge ordered the defense to provide a compliant disclosure. The disclosure was to comply both with Rule 16 and the evidentiary rules regarding expert testimony (e.g. FRE 702). The government sought to exclude the revised report under Criminal Rule 16, FRE 702, and Daubert.
Citing Daubert, FRE 702, Criminal Rule 16, and other grounds not critical to this analysis, the trial judge excluded the expert’s opinion testimony largely because the defense failed to establish that the opinions resulted from reliable principles and methods and that the expert applied those principles in the analysis at hand.
The en banc Tenth Circuit focused on the Daubert and FRE 702 rationale in upholding the expert’s exclusion and reinstating Nacchio’s conviction. Further, the court rejected the defense argument that it was entitled to establish the admissibility of the expert’s opinions on the stand, where he would have been subject to voir dire by the government. In this case, the government’s submissions and the trial judge’s instructions to the parties placed the defense on notice that providing notice under Criminal Rule 16 would be insufficient to get the expert to the stand, and that the defense would have to address the government’s objections under Daubert and FRE 702. The defense’s failure to address the Daubert and FRE 702 issues (the defense almost exclusively focused on Criminal Rule 16 in its submissions) was a strategic miscalculation, and, the en banc Tenth Circuit held, it was within the trial judge’s discretion to exclude the expert’s opinions under Daubert and FRE 702.
The impact of the en banc ruling and reasoning is twofold. First, the opinion signals that a trial court may, in its discretion and on appropriate notice, exceed Criminal Rule 16 requirements and obligate parties to establish a proffered expert’s compliance with Daubert and FRE 702 before allowing the expert to testify. Second, as in civil cases, it is not sufficient to show that the proffered expert is “qualified” in the general sense. Rather, in addition to having the appropriate qualifications, the proffered expert must demonstrate an application of reliable methods and principles to the facts of the particular case.
(With appreciation to Eric E. Reed, Esq., for contributing this entry)
