Delaware Business Litigation Report

Superior Court Acts as "Gatekeeper," Excludes Experts' Testimony on Damages

Empire Financial Services, Inc. v. Bank of New York (Delaware), C.A. 00C-09-235 SCD, 2007 WL 1677580 (Del. Super. Ct. June 8, 2007).

The Delaware courts have adopted the United States Supreme Court’s holdings in Daubert and Kumho Tire and apply these precedents along with DRE 702 when deciding the admissibility of expert testimony. Daubert established a “gatekeeper” role for the trial judge to play in determining whether expert testimony is both relevant and reliable. And Kumho Tire extended this role to all types of expert testimony, not just the sort based on scientific knowledge.

Here, the Superior Court performed its “gatekeeper” function by excluding the testimony of two of the plaintiff’s damages experts. Plaintiff Empire won on liability, proving that one of Defendant Bank of New York’s employees reached an unlawful agreement with one of Empire’s former employees to transfer active accounts to a new debt collection business started by the departing employee. But Empire still had to prove its damages and sought to do so through the expert testimony of Zelenovskiy and Landrum. Defendant Bank of New York filed motions in limine.

The court excluded the testimony of Zelenovskiy as not relevant to the issue of damages. His testimony related to document retention, an issue already raised in a spoliation motion and ruled upon.

The court also excluded all eight opinions offered by Landrum because they did not comport with DRE 702 and Daubert. For example, the court noted that (1) Landrum was unable to quantify the extent to which Empire would have recovered “more” than the bank did, making the opinion too speculative; (2) Landrum could not reconstruct the mathematical basis for his estimate of the cost for processing the paying accounts, demonstrating the uncertainty of the methodology used to perform the calculations, the lack of reproducibility, and the overall unreliability of the opinion; and (3) Landrum only used a one-third sample to develop his opinion on Empire’s overall recovery rate, basing his generalized opinion then on an inadequate foundation.

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