Sawant et al v. Ramsey et al

Filing 404

ORDER denying 401 Motion for Reconsideration ; granting 401 Motion for Clarification. See attached memorandum of decision. Signed by Judge Vanessa L. Bryant on 6/6/12. (Attachments: # 1 Redacted Expert Report of R. Alan Miller) (Hildebrand, J.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

ANIL SAWANT, ET AL.
Plaintiffs,
v.
GEOFFREY RAMSEY ET AL.,
Defendants.

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CIVIL ACTION NO.
3:07-cv-980 (VLB)
June 6, 2012

MEMORANDUM OF DECISION GRANTING IN PART AND DENYING IN PART [401]
MOTION FOR RECONSIDERATION
For the following reasons, the Defendants’ Motion for Reconsideration of
the Court’s Order [Dkt. #396] holding that the Plaintiffs’ expert will be permitted to
testify as to the Plaintiffs’ damages and materiality is hereby GRANTED IN PART
and DENIED IN PART.
The Court’s initial evidentiary ruling, issued on May 8, 2012 [Dkt. #362],
addressed the Defendants’ challenge to the qualifications of and methodology
utilized by the Plaintiff’s expert, R. Alan Miller (“Miller”). The Court concluded that
Miller was qualified to offer an expert opinion as the issue of damages sustained
by the various Plaintiffs. The Court then ordered the Plaintiffs to submit
additional briefing addressing the issue of whether or not Miller’s testimony as to
materiality would usurp the role of the jury by opining on the ultimate issue. [See
Dkt. #362, Evidentiary Ruling, p. 9]. After Plaintiffs failed to submit the requested
briefing by the deadline of May 11, 2012, set forth in the Court’s evidentiary
ruling, the Court extended the Plaintiffs a second opportunity to submit the
requested briefing, imposing a subsequent deadline of May 25, 2012.

On May 31, 2012, the Court issued an Order permitting Plaintiffs’ expert to
testify as to damages and materiality. On June 1, 2012, Defendants moved for
reconsideration of the Court’s Order permitting testimony by Plaintiffs’ expert as
to materiality, asking the Court to provide clarification of the basis for the Court’s
Order so as to preserve the issue for appeal and to facilitate a meaningful review
of the Court’s decision. The Court offers the following articulation to clarify,
without altering [Dkt. #396] the Court’s prior ruling.
Rule 704 of the Federal Rules of Evidence expressly rejects a prior tenet of
the rules of evidence, providing that an opinion offered by an expert witness need
not be excluded simply because it embraces an ultimate issue in the case. See
Fed. R. Evid. 704(a) (stating that “[a]n opinion is not objectionable just because it
embraces an ultimate issue.”). However, the Notes of the Advisory Committee on
Proposed Rules which follow Rule 704 emphasize that Rule 704 does not provide
a categorical authorization for the admission of expert testimony as to the
ultimate issue in a case. Rather, the Notes clarify that “[t]he abolition of the
ultimate issue rule does not lower the bars so as to admit all opinions. Under
Rules 701 and 702, opinions must be helpful to the trier of fact, and Rules 403
provides for exclusion of evidence which wastes time.” Notes of Advisory
Committee on Proposed Rule 704, Fed.R.Evid. As the Notes recognize, Rules 701,
702, and 403, provide the Court with the grounds upon which to exclude expert
testimony which would “merely tell the jury what result to reach.” Id.
The Notes of the Advisory Committee on Proposed Rules following Rule
702 provide further guidance regarding the limitations on the admissibility of

expert testimony, noting that “it seems wise to recognize that opinions are not
indispensable and to encourage the use of expert testimony in non-opinion form
when counsel believes the trier [of fact] can itself draw the requisite inference.”
Notes of Advisory Committee on Proposed Rule 702, Fed. R. Evid. The Notes to
Rule 702 instruct that “ ‘[t]here is no more certain test for determining when
experts may be used than the common sense inquiry whether the untrained
layman would be qualified to determine intelligently and to the best possible
degree the particular issue without enlightenment from those having a
specialized understanding of the subject involved in the dispute.’ ” Id. (citation
omitted).
As the Second Circuit has recognized, mindful of the rules and advisory
committee notes set forth in the Federal Rules of Evidence, “in complex cases
involving the securities industry, expert testimony may help a jury understand
unfamiliar terms and concepts.” U.S. v. Bilzerian, 926 F.2d 1285, 1294 (2d Cir.
1991). However, the Second Circuit expressly noted that the use of such expert
testimony “must be carefully circumscribed to assure that the expert does not
usurp either the role of the trial judge in instructing the jury as to the applicable
law or the role of the jury in applying the law to the facts before it.” Id. (citing
Marx & Co., Inc. v. Diners’ Club, Inc., 550 F.2d 505, 510-11 (2d Cir.), cert denied,
434 U.S. 861, 98 S.Ct. 188, 54 L.Ed.2d 134 (1977)). Although it is often difficult to
draw the line, “[a]s a general rule, an expert’s testimony on issues of law is
inadmissible.” Id. (citation omitted). While “an expert may opine on an issue of

fact within the jury’s province, he may not give testimony stating ultimate legal
conclusions based on those facts.” Id.
In accordance with these principles, as set forth in the Federal Rules of
Evidence and as articulated by the Second Circuit, the Court finds that portions
of the report of Plaintiffs’ expert, Miller, and his testimony sought to be offered,
are inadmissible. Specifically, the portions of Miller’s report and proffered
testimony regarding Plaintiffs’ damages and general information regarding the
stock market, the various participants in the investment community, the ways in
which information is transmitted to market participants, and their evaluation of
securities are admissible. To the extent that Miller’s report and proffered
testimony opines on the “materiality” of the purported misrepresentations and
omissions at issue in his case as a legal conclusion, such testimony is
inadmissible. See Bilzerian, 926 F.2d at 1294. Although in some instances, in the
context of a much more complicated segment of the stock market, expert
testimony may be admissible as helpful to suggest “the inference which should
be drawn from applying the specialized knowledge to the facts,” the Court finds
that the facts presented by the current case are simple and straightforward such
that the jury may, with the benefit of the expert testimony to provide general
background as to the overall function and behavior of the securities market,
apply the law as instructed by the Court to the facts as presented by the
evidence. See Notes of Advisory Committee on Proposed Rule 702, Fed. R. Evid.
Accordingly, the Court has redacted the inadmissible portions of the body
of the report as it pertains to liability (as opposed to damages). The report will

have to be further redacted as to damages after the Plaintiffs’ liability evidence
has been admitted at which time the Court will be able to discern the Plaintiffs as
to and about which evidence has been admitted. The Court further notes that the
exhibits to the proffered expert report are inadmissible unless shown to
independently satisfy an applicable rule of evidence.
IT IS SO ORDERED.
_______/s/____________
Hon. Vanessa L. Bryant
United States District Judge

Dated at Hartford, Connecticut: June 6, 2012