Rivera et al v. Greffin et al

Filing 247

Opinion and Order: Plaintiffs' motion to bar the testimony of Harvey Pitt 202 is granted. Signed by the Honorable William T. Hart on 3/17/2016:Mailed notice(clw, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
DANIEL RIVERA, STEPHEN
KENSINGER, DEBORAH JOY
MEACOCK, and REBECCA
SCHEUNEMAN,
Plaintiffs,
v.
ALLSTATE INSURANCE COMPANY,
Defendant.

)
)
)
)
)
)
)
)
)
)
)
)

No. 10 C 1733

OPINION AND ORDER
Plaintiffs' motion to bar the proposed expert testimony of Harvey Pitt is
before the court.
Defendant Allstate Insurance Company ("Allstate") disclosed to
plaintiffs that Pitt, a lawyer and former Chairman of the Securities and Exchange
Commission ("SEC"), is a percipient witness who participated in the investigation
of the case and, therefore, was not required to provide a written report. See Fed.
R. Civ. P. 26(a)(2)(C). It was ruled, however, that the Rule 26 disclosure made to
plaintiffs was inadequate. Allstate filled a second disclosure providing additional
detail. Plaintiffs then deposed Pitt.

Allstate contends that Pitt's expert testimony is relevant (1) to establish
its qualified privilege defense, (2) to refute the contention that the qualified
privilege was abused, and (3) to testify as a fact witness who investigated the facts
which have given rise to plaintiffs claims. Although Allstate states that the
witness is not offering legal conclusions, it has withheld documents from
discovery based on an attorney-client privilege and contends that it is not required
to waive its privilege because it does not plan to rely on advice of counsel as a
defense at trial. This argument runs counter to the usual rule that an expert is
required to disclose all of the information considered to reach any opinion
presented.
The existence of a qualified privilege is a question of law to be
determined by the court. Kuwik v. Starmark Star Mktg. &Admin., Inc., 156
Ill. 2d 16, 619 N.E.2d 129, 133 (1993); Babb v. Minder,806 F.2d 749, 753
(7th Cir. 1986). Plaintiffs do not dispute that Allstate had a duty to make
disclosures to the SEC based on Regulation S-K, 17 C.F.R. Part 229, requiring
public companies to issue a 10-K report at the end of each fiscal year specifying
the information that must be included, the procedures, and the penalties for failure
to follow the regulations. The jury will be instructed that Allstate had a qualified

-2-

privilege to make the written disclosures in issue.
There is no need for Pitt's testimony in order to establish Allstate's
qualified privilege.
The resolution of plaintiffs' defamation claims will likely turn on the
question of whether Allstate abused a qualified document disclosure privilege by
reporting results and data which were false and defamatory. Allstate seeks to have
Pitt testify in support of its contention that it did not abuse its privilege. Abuse of
privilege will be a question of fact for the jury. Other witnesses will be called to
relate technical facts upon which the reports are based. Pitt testified in his
deposition that he was engaged to review the methodology of the investigation and
give advice as to the attitude of the SEC enforcement staff in instances in which
such disclosure is required. He would also testify about what investors would
want to learn from a 10-K report. Pitt did not prepare the documents in issue or
assume responsibility for the contents.
Federal Rules of Evidence 702 and 704 prohibit experts from offering
opinions as to legal issues that will determine the outcome of a case. See Good
Shepard Manor Found., Inc. v. City of Momence, 323 F.3d 557, 564 (7th Cir.
2003); U.S. v. Sinclair, 74 F.3d 753, 757 n. 1 (7th Cir. 1996). Much of the

-3-

proposed testimony relates legal conclusions and also enforcement issues that
need not be reached. In Salem v. U.S. Lines Co., 370 U. S. 31, 35 (1962), the
Supreme Court observed that when facts are accurately presented a jury can make
a proper determination without expert testimony. This is such a case. The
proposed testimony of Pitt concerning SEC practices is not necessary or helpful
and poses problems of sorting out argument and legal conclusions from expert
opinions. The jury can decide whether or not the qualified privilege was abused
based on the facts to be presented without being told about SEC practices or what
an investor would want to know.
IT IS THEREFORE ORDERED that plaintiffs' motion to bar the
testimony of Harvey Pitt [202] is granted.
ENTER:

UNITED STATES DISTRICT JUDGE
DATED: MARCH 17, 2016

-4-