Court of Appeals Remands Telecommunications Case Finding 3 Expert Witnesses Violate Code of Civil Procedure

Court: Court of Appeal of Louisiana, First CircuitJurisdiction: FederalCase Name: CamSoft Data Sys. v. Southern Elecs. Supply, Inc.Citation: 2019 La. App. Unpub. LEXIS 199

Facts

This issue involves an appeal from Dell, Inc., and Dell Marketing, L.P. (collectively Dell) seeking review of the trial court’s judgment which denied their joint motions in limine to exclude all three of the experts presented by the plaintiff, CamSoft.

The appellants alleged that there was an error on the part of the trial court in failing to comply with Louisiana Code of Civil Procedure article 1425(F)(4) by not giving detailed reasoning behind its decision to allow expert testimony concerning CamSoft’s lost business value and lost market share. The appellants further argued that Camsoft’s rebuttal expert testimony was irrelevant, and thus, inadmissible as per the standards laid down in Daubert v. Merrell Dow Pharmaceuticals, Inc.

The Experts

CamSoft retained an expert in the mobile telecommunications industry to opine on CamSoft’s lost market share. The plaintiff also retained a business valuation expert to opine on the lost business value and a rebuttal expert witness.

Discussion

The provisions under the Louisiana Code of Civil Procedure article 1425(F)(3) and (4) are as follows:

(3) If the ruling of the court is made at the conclusion of the hearing, the court shall recite orally its findings of facts, conclusions of law, and reasons for judgment. If the matter is taken under advisement, the court shall render its ruling and provide written findings of facts, conclusions of law, and reasons for judgment not later than five days after the hearing.

(4) The findings of facts, conclusions of law, and reasons for judgment shall be made part of the record of the proceedings. The findings of facts, conclusions of law, and reasons for judgment shall specifically include and address:

• (a) The elements required to be satisfied for a person to testify under Articles 702 through 705 of the Louisiana Code of Evidence.
• (b) The evidence presented at the hearing to satisfy the requirements of Articles 702 through 705 of the Louisiana Code of Evidence at trial.
• (c) A decision by the judge as to whether or not a person shall be allowed to testify under Articles 702 through 705 of the Louisiana Code of Evidence at trial.
• (d) The reasons for the judge detailing in law and fact why a person shall be allowed or disallowed to testify under Articles 702 through 705 of the Louisiana Code of Evidence.

The court noted the trial court erred in its decision to admit the plaintiff’s telecommunications expert witness testimony. The trial court claimed that the telecommunications expert used a widely accepted method of market share analysis and offered his opinion on “an emergent changing industry”. However, it was found that neither the judgment nor the reason for judgment adhered to the requirements of the Louisiana Code of Civil Procedure, Article 1425.

Similarly, the trial court’s decision to allow the business valuation expert’s testimony was also at fault because the trial court merely gave oral reasons for its judgment and held that the expert’ methodology appeared “to have been accepted”, where it had also added that the question of whether the business valuation expert had enough material to support his evidence.

The court also noted that the trial court’s decision to admit the rebuttal expert’s testimony was also at fault because the rebuttal expert had testified that his opinion was that the business valuation expert had conducted his analysis in accordance with the National Association of Certified Valuators and Analysts (NACVA) professional standards. The rebuttal expert specifically stated that his report did not constitute “a business valuation engagement presenting a conclusion of value, a calculation engagement presenting a calculation of value, or a business appraisal review.” The court noted that since the rebuttal expert’s testimony centered around the business valuation expert’s testimony, and the trial court had erred in admitting the business valuation testimony, it also rendered the rebuttal expert’s testimony inadmissible.

Held

The court vacated the trial court’s judgment and remanded the matter back to the trial court because of the presence of legal errors in the trial court’s judgments.

What We Can Learn From This Case

Merely stating the reasons for allowing a telecommunication expert testimony orally does not conform to the requirements of La. Code Civ. P., art. 1425.