CSX Transportation, Inc. v. Gilkison et al
Filing
1490
MEMORANDUM OPINION AND ORDER Relating to CSX Transportation, Inc,'s Motions in Limine: Denying 1411 Motion in Limine; Granting in part and Denying in part 1412 Motion in Limine; Granting in part and Denying in part 1413 Motion in Limine; and Granting in part and Denying in part 1414 Motion in Limine; Signed by Senior Judge Frederick P. Stamp, Jr on 12/6/12. (soa)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
CSX TRANSPORTATION, INC.,
Plaintiff,
v.
Civil Action No. 5:05CV202
(STAMP)
ROBERT V. GILKISON,
PEIRCE, RAIMOND & COULTER, P.C.,
a Pennsylvania professional corporation
a/k/a ROBERT PEIRCE & ASSOCIATES, P.C.,
a Pennsylvania professional corporation,
ROBERT PEIRCE, JR., LOUIS A. RAIMOND,
MARK T. COULTER and RAY HARRON, M.D.,
Defendants.
MEMORANDUM OPINION AND ORDER
RELATING TO CSX TRANSPORTATION, INC.’S MOTIONS IN LIMINE
Pending before this Court are certain motions in limine filed
by plaintiff, CSX Transportation, Inc. (“CSX”), and the defendants,
Robert N. Pierce, Jr., Louis A. Raimond, and Ray Harron, M.D.,
relative to the jury trial that is scheduled to commence on
Tuesday, December 11, 2012. This Court has reviewed these separate
motions and makes the following findings concerning the plaintiff
CSX’s motions in limine:
1.
CSX’s Motion in Limine to Exclude the Counterclaims-Related
Testimony of the Lawyer Defendants’ Expert Witness R. Gregory
McDermott (ECF No. 1412) -- GRANTED IN PART AND DENIED IN PART.
By this motion, CSX seeks to preclude the lawyer defendants’
expert, Gregory McDermott, from providing counterclaims-related
testimony.
In support of this, CSX asserts that each of the five
opinions in Mr. McDermott’s reports runs afoul of the admissibility
requirements of Daubert v. Merrel Dow Pharm., Inc., 509 U.S. 579
(1993) and Fed. R. Evid. 702.
First, CSX asserts that Mr.
McDermott’s opinion that the lawyer defendants’ past practice with
respect to releases renders CSX’s claim fraudulent should be
excluded for the following three reasons: (1) Mr. McDermott has no
“knowledge,
skill,
experience,
training
or
education,”
in
accordance with Fed. R. Evid. 702 that would qualify him to opine
on the course of conduct between the lawyer defendants and CSX with
respect to prior releases, and he has no experience with mass
litigation; (2) Mr. McDermott offers no “scientific, technical, or
other specialized knowledge” concerning the past release practice
in accordance with Fed. R. Evid. 702; (3) Mr. McDermott’s core
testimony that, in light of this past practice, CSX’s allegations
in
the
amended
inadmissible
complaint
legal
were
conclusion.
“false”
Second,
and
CSX
“material”
argues
is
that
an
Mr.
McDermott’s assertion that the mere existence of the prior Baylor
release renders CSX’s Baylor-related claims fraudulent is purely a
legal conclusion that is inadmissible. Third, CSX asserts that Mr.
McDermott’s testimony regarding the duty of candor is unreliable
and
should
not
be
admitted.
Fourth,
CSX
argues
that
Mr.
McDermott’s implicit opinion that the language of CSX’s amended
complaint should be interpreted to have alleged that CSX was forced
to expend “substantial” resources to defend the Baylor claim alone
2
should
be
excluded
because
it
is
not
based
on
scientific,
technical, or specialized knowledge nor does he offer a factual
basis or explanation for the interpretation or have personal
knowledge of CSX’s intent.
Fifth, CSX argues that Mr. McDermott’s
opinion addressing the “discovery fraud” allegations in Count II of
the counterclaims provides only a legal conclusion and is therefore
inadmissible.
The lawyer defendants respond to these argument by stating:
(1) that Mr. McDermott has the necessary qualifications of an
expert witness under Fed. R. Evid. 402; (2) the testimony set forth
in the McDermott report will be helpful to the jury under Fed. R.
Evid. 702; and (3) the McDermott report does not contain an opinion
on the duty of candor as described by CSX.
Insomuch as CSX argues that testimony by Mr. McDermott should
be excluded because he is not qualified under Fed. R. Evid. 702,
that argument fails.
certainly
As the lawyer defendants indicate, CSX can
cross-examine
Mr.
McDermott
on
particulars
of
his
experience, but that certainly does not render him unqualified.
Mr. McDermott’s background as a civil litigator along with his
other
achievements
show
that
qualifications lacks merit.
such
an
argument
regarding
his
Therefore, this Court denies CSX’s
motion in limine insomuch as it argues that Mr. McDermott’s
testimony should be excluded based on his lack of qualifications.
3
However, Mr. McDermott’s testimony that merely states legal
conclusions and thus are unhelpful to the jury are excluded.
Although, according to Federal Rule of Evidence 702, “testimony in
the form of an opinion or inference otherwise admissible is not
objectionable because it embraces an ultimate issue to be decided
by the trier of fact[,]” such testimony still “must be otherwise
admissible under the Rules of Evidence.” United States v. Perkins,
470 F.3d 150, 157 (4th Cir. 2006) (citing Weinstein’s Federal
Evidence § 704.03(1) (2d ed. 2002)).
The United States Court of
Appeals for the Fourth Circuit explained this concept by stating:
[T]he testimony must be helpful to the trier of fact, in
accordance with Rules 701 and 702, and must not waste
time, in accordance with Rule 403. “These provisions
afford ample assurances against the admission of opinions
which would merely tell the jury what result to reach,
somewhat in the manner of the oath-helpers of an earlier
day.”
Id. (citing United States v. Barile, 286 F.3d 749, 759-60 (4th Cir.
2002) (quoting Fed. R. Evid. 704 advisory committee note)).
The
Fourth Circuit stated that it is therefore, “the district court’s
task . . . ‘to distinguish [helpful] opinion testimony that
embraces an ultimate fact from [unhelpful] opinion testimony that
states a legal conclusion.’” Id. (quoting United States v. Barile,
286 F.3d 749, 760 (4th Cir. 2001).
To do so, a court must
“determine whether the terms used by the witness have a separate,
distinct and specialized meaning in the law different from that
present in the vernacular.”
Id. at 158 (citations omitted).
4
As
the Fourth Circuit indicates, this is not an easy task, as “[t]he
rule
makes
ultra-fine
distinctions,
turning on word choice.”
with
admissibility
often
Id.
CSX’s first contention regarding specific language found in
Mr. McDermott’s expert report that CSX would like to be excluded
revolves around the words “false” and “material.”
that
such
statements
should
be
impermissible legal conclusions.
excluded
as
CSX believes
they
constitute
Through analyzing the relevant
case law above, this Court finds that while Mr. McDermott’s use of
the
“false”
in
referring
to
CSX’s
statements
is
not
an
impermissible legal conclusion, Mr. McDermott’s use of “material”
is.
While
“false”
does
not
have
a
“separate,
distinct
and
specialized meaning in the law different from that present in the
vernacular[,]” “material” does.
As stated in Barile, “materiality
has a specialized legal meaning, and it is therefore within the
district court’s discretion to exclude such testimony.”
at 761.
286 F.3d
Therefore, this Court grants CSX’s motion insomuch as it
seeks to preclude testimony from Mr. McDermott that uses the term
“material.”
CSX’s second contention is that Mr. McDermott’s assertion that
the existence of the prior Baylor release renders CSX’s Baylorrelated claims fraudulent is purely a legal conclusion that is
inadmissible. This Court agrees. The Fourth Circuit has held that
“‘[m]anipulation’, ‘scheme to defraud,’ and ‘fraud’ are not self-
5
defining terms but rather have been the subject of diverse judicial
interpretations.”
1988).
United States v. Scop, 846 F.2d 135 (4th Cir.
Because the use of the word “fraud” or “fraudulent” has a
separate, distinct and specialized meaning in the law different
from that present in the vernacular[,]” this Court grants CSX
motion insomuch as it seeks to exclude testimony from Mr. McDermott
that uses the terms “fraudulent.”
CSX’s third contention is that testimony by Mr. McDermott
regarding the duty of candor is unreliable and therefore should be
excluded. The lawyer defendants respond that they do not intend to
have Mr. McDermott testify about ethical rules or the duty of
candor, because the lawyer defendants claim that such things are
not
subjects
of
his
report.
Therefore,
because
the
lawyer
defendants do not intend to offer such evidence, this Court denies
this portion of the motion as moot.
CSX’s fourth contention is that Mr. McDermott’s opinion that
the language of CSX’s amended complaint should be interpreted to
have alleged that CSX was forced to expend “substantial” resources
to defend the Baylor claim alone should be excluded.
CSX argues
that such opinion is not based on scientific, technical, or
specialized knowledge nor does Mr. McDermott offer a factual basis
or explanation for the interpretation or have personal knowledge of
CSX’s intent.
The lawyer defendants respond by stating that CSX
has not dealt with the actual opinion set forth in Mr. McDermott’s
6
report.
They contend that Mr. McDermott used his expertise as a
seasoned litigator to assess that the release, the parties’ past
practice, and the actions of a reasonable litigant make CSX’s
allegation false.
The lawyer defendants argue that this is not
something in the experience of a lay juror and therefore it is
helpful and should be admissible.
This Court finds there to be no
basis in the rules of evidence to exclude the exact testimony cited
by CSX.
CSX’s concerns are better addressed through cross-
examination.
Therefore, this portion of CSX’s motion in limine is
denied.
CSX’s
fifth
contention
is
that
Mr.
McDermott’s
opinion
addressing the “discovery fraud” allegations in Count II of the
counterclaims provides only a legal conclusion and is therefore
inadmissible.
Specifically,
CSX
argues
that
Mr.
McDermott’s
assertion that “CSX’s failure to disclose the Release and related
documents
and/or
to
properly
list
them
on
a
privilege
log
constitutes a material, false representation[,]” (ECF No. 1412 Ex.
1) is a conclusion that invades the province of the jury.
The
lawyer defendants respond, that Mr. McDermott’s report does not
provide an impermissible legal conclusion as it is helpful to a
jury because discovery obligations and the proper preparation and
interpretation of privilege logs are not within the experience of
the lay juror.
This Court finds that Mr. McDermott’s statement
concerning the “material, false representations” is merely a legal
7
conclusion, because as stated above, “materiality has a specialized
legal meaning, and it is therefore within the district court’s
discretion to exclude such testimony.”
Barile, 286 F.3d at 761.
Therefore, insomuch as CSX argues that such statement should be
excluded from testimony, the motion in limine is granted. However,
with regard to the rest of Mr. McDermott’s testimony dealing with
Count II, this Court finds no basis to exclude such testimony.
Thus, this Court must deny CSX’s motion in limine insomuch as it
seeks this Court to exclude all testimony concerning Count II of
the lawyer defendants’ counterclaims.
2.
CSX’s Motion to Exclude the Opinions and Report of Doctor
Henry K. Smith (ECF No. 1411) -- DENIED.
By this motion, CSX seeks to exclude the opinions and reports
of one of the lawyer defendants’ possible witnesses, Henry K.
Smith, D.O.
Dr. Smith reviewed x-rays of Earl Baylor in producing
a B read used apart from this litigation and apart from the
underlying Federal Employer’s Liability Act (“FELA”) claim filed by
the lawyer defendants. In support of this motion, CSX argues that:
(1) Dr. Smith’s opinions should be excluded as unreliable because
he took the liberty to perform a composite B read of two admittedly
inadequate x-rays in violation of all known B reading conventions;
and (2) the opinion of Dr. Smith should be excluded under Rule 403
because the minimal, if any, probative value is substantially
outweighed by the risk of unfair prejudice and juror confusion. In
8
their response to this motion, the lawyer defendants assert that
Dr.
Smith’s
evidence
is
admissible
under
Fed.
R.
Evid.
702
standards, and his evidence is factually probative.
CSX’s first contention that Dr. Smith’s opinions should be
excluded as unreliable lacks merit.
CSX argues that, because he
failed to follow the mandatory methodology prescribed by a federal
agency in doing his B reads, and because there is nothing to
suggest that his reading was permissible, acceptable, or reliable,
this Court should exclude Dr. Smith’s evidence under Rule 702 for
not satisfying the Daubert
standards.
First, as the lawyer
defendants indicate, they are calling him as a fact witness, and
only reserve the right to qualify him as an expert if needed.
ECF No. 1447 *7.
See
Therefore, it is unclear whether Mr. Smith’s
testimony or evidence must meet the Daubert standards.
Even if it
must meet such standards, this Court finds that it would.
The introduction of expert opinion testimony is governed by
Rule 702 of the Federal Rules of Evidence, which states:
A witness who is qualified as an expert by knowledge,
skill, experience, training, or education may testify in
the form of an opinion or otherwise if:
(a) the expert’s scientific, technical, or
other specialized knowledge will help the
trier of fact to understand the evidence or to
determine a fact in issue;
(b) the testimony is based on sufficient
facts or data;
(c) the testimony is the product of reliable
principles and methods; and
(d) the expert has reliably applied the
principles and methods to the facts of the
case.
9
Fed. R. Evid. 702.
dispute.
This first prong of Fed. R. Evid. 702 is not in
However, the other three prongs are in dispute.
This
Court agrees with the lawyer defendants in finding that those three
prongs are met.
First, Dr. Smith’s testimony will be based on his
review of Mr. Baylor’s x-rays, which constitutes adequate data and
thus satisfies the second prong of Fed. R. Evid. 702. Second, this
Court finds that Dr. Smith used reliable principles and methods in
reading both x-rays.
See ECF No. 1424 Ex. 2.
Even if Dr. Smith
did not follow the mandatory methodology prescribed by a federal
agency as CSX asserts, this does not mean his method of using two
separate
x-rays
was
unreliable.
The
defendants
produced
a
declaration from Dr. David Laman stating that the methodology
prescribed by the federal agency does not affect the substantive
reliability of an informed professional medical opinion based on
the reading of multiple x-rays.
Id.
his
to
experience
it
is
common
Dr. Laman also states that in
evaluate
a
person’s
condition based on a reading of multiple x-rays.
medical
The lawyer
defendants are correct in stating that CSX’s criticism of the
chosen methodology goes more towards the weight of the evidence
rather than the admissibility and such criticism may be used during
cross-examination.
The third prong is met based on a reading of
Dr. Smith’s deposition.
See ECF. 1424 Ex. 1.
This testimony
indicates to this Court that he reliably applied the methodology he
used to his reading of Mr. Baylor’s x-rays.
10
CSX’s next argument that Dr. Smith’s evidence’s probative
value is substantially outweighed by the risk of unfair prejudice
and juror confusion also lacks merit.
CSX argues that Dr. Smith’s
readings are not probative as they are based on different x-rays
than those used by the lawyer defendants’ B readers and the lawyer
defendants did not even know about Dr. Smith’s opinion prior to
filing the underlying action.
CSX asserts that because the jurors
may not appreciate these facts, the prejudice is extreme.
Court disagrees.
This
As the lawyer defendants indicate, Dr. Smith’s
readings support the reasonableness or accuracy of later readings
that found the same thing regardless of whether they were based on
the same x-rays and thus the evidence is probative.
Further, this
Court does not believe that CSX will be prejudiced from the
introduction of such evidence, as it believes that a jury will be
capable of understanding that different x-rays were used by the
lawyer defendants’ readers and the fact that the lawyer defendants
did not know about the reports from Dr. Smith until after filing
the Baylor suit.
This Court further does not believe that the
introduction of Dr. Smith’s evidence will confuse or overwhelm the
jury, nor does it believe that it will cause such undue delay as to
necessitate its exclusion.
Therefore, because this Court finds
that such evidence should not be excluded under Fed. R. Evid. 702
or 403, it denies CSX’s motion in limine concerning Dr. Smith.
11
3.
Counterclaim-Defendant CSX’s Omnibus Motion in Limine (ECF No.
1414).
By this motion, CSX seeks to exclude various testimony and
evidence
relating
to
the
lawyer
defendants’
counterclaims.
Specifically, CSX wishes to preclude the lawyer defendants from:
(1) calling the parties’ attorneys as witnesses at trial or
introducing
deposition
testimony
from
those
attorneys;
(2)
presenting new theories of liability to the jury on Count I of the
counterclaims; (3) arguing to the jury or presenting evidence that
CSX committed fraud by not producing the complaint and dismissal
order from the 2002 Baylor action in discovery; (4) offering
speculative evidence regarding damages allegedly stemming from the
fraud asserted in Count II of the counterclaims; and (5) presenting
evidence
regarding
attorneys’
prosecuting their counterclaims.
fees
and
costs
incurred
in
The lawyer defendants oppose the
exclusion of this evidence and testimony.
a.
Calling parties’ attorneys as witnesses at trial or
introducing deposition testimony from those attorneys -- GRANTED AS
FRAMED.
CSX argues that the lawyer defendants should be held to their
representation in their opposition to CSX’s motion for separate
trials, that they will not rely on testimony from the parties’
current attorneys to prove their counterclaims at trial.
CSX
states that the lawyer defendants committed to not call CSX’s
12
counsel to the stand “absent a door opening.”
ECF. 1414 Ex. 1.
CSX claims that such an assurance is so vague as to not be an
assurance at all.
CSX argues that based on the doctrine of
judicial estoppel, which prevents a party from taking a stance that
is inconsistent with a prior litigation position, the lawyer
defendants should be precluded from calling any of CSX’s attorneys
as witnesses. Further, CSX states that the lawyers’ assertion that
they reserved the right to introduce deposition testimony from
counsel for the parties rather than relying on live testimony is a
strained reading of the lawyer defendants’ opposition to CSX’s
motion for separate trials that cannot withstand scrutiny and flies
in the face of the Federal Rules of Civil Procedure.
The lawyer defendants respond by stating that they do not
intend to call the parties’ attorneys as live witnesses and, if
necessary, would suggest that any testimony from counsel come via
deposition testimony that is rendered anonymous.
The lawyer
defendants state that they are only reserving the right to put on
attorney testimony in the unlikely event that some action by CSX
opens the door to such testimony.
This Court believes that the record adequately reflects the
lawyer defendants’ intent to prove their counterclaims without
testimony of their current defense counsel or CSX’s counsel. While
the lawyer defendants seek to preserve the right to call such
attorneys if made necessary by some possible “door opening,” the
13
lawyer defendants acknowledge that this is an “unlikely event.”
While this Court is willing to consider such a remote possibility
should it arise, this Court believes there would be a heavy burden
upon any party seeking to call any attorney during trial based upon
the prior representations made in this case whether that testimony
comes in through live testimony or by depositions.
b.
Presenting new theories of liability to the jury on Count
I of the counterclaims -- GRANTED.
CSX argues that the lawyer defendants should be precluded from
presenting new theories of liability to the jury on Count I of the
counterclaims.
CSX
argues
that
in
the
lawyer
defendants’
counterclaims, the lawyer defendants alleged that CSX’s allegations
regarding the Baylor claim were false because CSX had a release
that the lawyer defendants, based on past practice, would have
accepted.
Now, CSX states that the lawyer defendants disclaimed
their initial theory of liability at the close of discovery and
injected at least three new theories into the case.
These new
theories are: (1) the allegations were fraudulent regardless of
whether the lawyer defendants would have accepted the release; (2)
the mere existence of the release rendered CSX’s allegations
fraudulent; and (3) the res judicata effect of the prior dismissal
rendered the 2006 asbestosis claim not viable from the start.
CSX
alleges that these new theories are untimely and that it would be
prejudiced by the introduction of them.
14
The lawyer defendants respond to this motion in limine by
arguing the CSX has invented the existence of supposed “entirely
new theories of liability” and the counterclaims remain the same.
The lawyer defendants argue that the new theories are either
expressly pled or are merely unsurprising references by the lawyer
defendants to evidence that is admissible as evidence of the fraud,
even if not a separate basis for liability.
This Court agrees with plaintiff CSX that the matters raised
recently by the lawyer defendants were not sufficiently pleaded in
the counterclaims and should have been the subject of a timely
motion to amend the counterclaim.
The plaintiff would be unfairly
prejudiced by having to address these three matters at trial at
this point. The need to have included these matters in some detail
is particularly true where, as here, the claims are for fraud which
must follow the heightened pleading requirements under Rule 9(b) of
the Federal Rules of Civil Procedure.
This Court does not agree
with the lawyer defendants’ contention that these matters are
somehow subsumed expressed or implied by the assertions in the
counterclaim.
c.
Arguing to the jury or presenting evidence that CSX
committed fraud by not producing the complaint and dismissal order
from the 2002 Baylor action in discovery -- GRANTED AS FRAMED.
CSX seeks to preclude the lawyer defendants from arguing or
presenting evidence that CSX committed fraud by not producing the
15
complaint and dismissal order from the 2002 Baylor action in
discovery, as this allegation is not included in the counterclaims.
CSX argues that such an allegation by the lawyer defendants
constitutes a new and additional claim of fraud, which was not
pleaded in the counterclaim and thus cannot be alleged at trial.
The lawyer defendants respond by stating that they are entitled to
present the 2002 complaint and dismissal order.
The lawyer
defendants argue that CSX’s failure to turn over the documents
shows a lack of mistake and motive on the fraud counterclaim
related to the release.
This motion in limine is granted for the same reasons that the
Court granted the above-referenced motion in limine relating to the
presentation of “new theories of liability on Count I of the
counterclaim.”
Since the Court is not permitting any of the three
matters raised above, of which the complaint and dismissal order is
one, this Court does not believe that evidence regarding the
complaint and dismissal in the first Baylor civil action should be
used as evidence of fraud.
However, CSX argues that the 2002
complaint and dismissal order might be admissible to “the extent
that the lawyer defendants can establish that evidence regarding
the two documents is relevant to their claims that CSX committed
fraud by not producing the release, it may be admissible for that
limited purpose, provided it otherwise satisfies the Federal Rules
of Evidence” (ECF No. 1414 *16).
16
The parties shall alert this
Court at or prior to trial as to how and when any such evidence
would be offered.
d.
Offering speculative evidence regarding damages allegedly
stemming from the fraud asserted in Count II of the counterclaims
-- DEFERRED.
CSX requests that this Court preclude the lawyer defendants
from offering speculative evidence regarding damages allegedly
stemming from the fraud asserted in Count II of the counterclaims.
CSX alleges that the lawyer defendants’ theory on damages for Count
II of the counterclaims appears to be that, if CSX had produced the
release in February 2009, the lawyer defendants would have soon
after filed a motion for summary judgment and sought to stay
discovery.
CSX argues that this theory depends on the idea that
this Court would have granted a stay and ruled in the lawyer
defendants’ favor on the summary judgment motion.
CSX argues that
the lawyer defendants cannot establish either of those propositions
by anything other than conjecture at this point, and proof of
damages cannot be sustained by mere speculation or conjecture.
Therefore, CSX states that the lawyer defendants should not be
allowed to offer speculative evidence on the damages.
The lawyer
defendants respond by stating that they are entitled to present
evidence of damages stemming from Count II of the counterclaims.
The lawyer defendants compare their evidence to that offered in a
legal malpractice case to prove damages, and contend that the
17
amount and reasonableness of damages is a fact question for the
jury.
At this stage of the case in which no evidence of any kind,
much less evidence of any damages to any party, this Court will
defer ruling on this motion until trial.
Assuming that the issue
of any damages goes to the jury, this Court will instruct the jury
on the issue of damages which can include the admonition that
damages, like other issues, may not be awarded on speculation but
also to the effect that it is the uncertainty as to the fact of
damages and not as to the amount of damages resulted and mere
uncertainty as to the amount does not justify a jury in refusing
recovery.
Such instruction, along with other instructions, would,
of course, be reviewed with counsel at the charge conference at the
conclusion of all evidence.
e.
Presenting evidence regarding attorneys’ fees and costs
incurred in prosecuting their counterclaims -- GRANTED IN PART and
DEFERRED IN PART.
Within this motion, CSX lastly seeks to preclude the lawyer
defendants from presenting evidence regarding attorneys’ fees and
costs incurred in prosecuting their counterclaims. CSX argues that
because this Court previously ruled that a party’s attorneys’ fees
for the prosecution of a fraud claim is not a “fact of consequence”
to be proven at trial and are therefore not discoverable as
relevant evidence, this Court should also preclude the lawyer
18
defendants from offering such evidence at trial under Fed. R. Evid.
402.
Further,
CSX
argues
that
inclusion
of
such
fees
in
documentation submitted to the jury could easily confuse and
mislead the jury, which would then prejudice CSX by opening the
door to an inflated damages award. Therefore, CSX argues that such
evidence should also be precluded under Fed. R. Evid. 403.
The
lawyer defendants respond by stating that they will not seek such
fees as damages at trial but rather in the form of a post-trial
petition.
The lawyer defendants do state however, that they
“reserve the right to present the full picture as to the harm
suffered by the [l]awyer [d]efendants by CSX’s fraud so the jury
understands that insurance will not cover the entire loss by CSX’s
fraud so the jury understands that insurance will not cover the
entire loss and that a portion of that loss (in the form of fees
spent defending against the Baylor claim prior to filing of the
counterclaims) is recoverable as damages on the [c]ounterclaims.”
As noted, the lawyer defendants respond to this motion by
noting that “[b]ased on the court’s prior ruling, the [l]awyer
[d]efendants will not seek such fees as damages at trial but rather
in the form of a post-trial petition.”
agreement.
That issue is resolved by
However, the lawyer defendants go on to “reserve the
right to present the full picture as to the harm suffered by the
[l]awyer [d]efendants by CSX’s fraud so the jury understands that
insurance will not cover the entire loss and that a portion of that
19
loss (in the form of fees spent defending against the Baylor claim
prior to filing of the counterclaims) is recoverable as damages on
the [c]ounterclaims.”
These defendants go on to state that “[i]n
order to ensure a full recovery on the counterclaims, this will
require submission of some evidence as to total attorney’s fees and
costs even if not under the rubric of trial damages.” This strikes
this Court as an attempt to accomplish somewhat the same thing
being disallowed but only in a different way.
However, this Court
will defer a final ruling until it has had an opportunity to
discuss this issue at trial prior to any offer of such proof.
4.
CSX’s Omnibus Motion in Limine to Exclude Certain Evidence and
Argument
By this motion, CSX seeks to exclude various testimony and
evidence.
Specifically, CSX wishes to have the following evidence
and argument excluded: (1) evidence or argument concerning CSX’s
alleged negligence or fault with respect to asbestos; (2) evidence
regarding alleged asbestos usage not related to the time periods,
work locations, and crafts of the claimants at issue; (3) evidence
of other claims or settlements as proof that any particular
asbestos claim against CSX had merit; (4) evidence or argument
concerning CSX tort reform initiatives and/or argument that this
case is an attempt to eliminate asbestos litigation; (5) media
coverage regarding this case or the underlying asbestos litigation;
(6) evidence or argument that CSX had or did not have insurance
20
coverage for asbestos claims; (7) evidence or argument regarding
any litigation or arbitration between CSX and its insurers; (8) any
comment or argument regarding the dismissal of certain parties or
the fact that certain parties were not named as defendants; and (9)
evidence or argument concerning the amount any party has spent in
the prosecution or defense of this case.
a.
Evidence or argument concerning alleged negligence or
fault with respect to asbestos -- GRANTED AS FRAMED.
CSX seeks to preclude the defendants from introducing evidence
that CSX or any of its predecessors was negligent or otherwise at
fault with respect to asbestos as it is not a relevant issue in
this case.
Further, CSX states that such evidence should be
excluded as it would prejudice the jury or confuse the true factual
issues at trial.
CSX states that to the extent that the lawyer
defendants seek to introduce evidence of CSX’s alleged failure to
warn its employees regarding asbestos-containing products to show
that the lawyer defendants’ clients needed help identifying such
products, such a point can be made without resorting to 80 years
worth of historical documents.
The lawyer defendants respond by
stating that they are entitled to introduce evidence and argue
about CSX’s fault with respect to asbestos, including its knowing
exposure of employees to asbestos without adequate warning, as they
argue that this was critical to their decision making in bringing
the underlying FELA claims at issue. The lawyer defendants contend
21
that such evidence is not unfairly prejudicial or likely to be
excessively confusing to the jury.
Instead, they contend that it
would be prejudicial for them not to be able to introduce such
evidence.
This Court agrees with the plaintiff that presentation of
evidence of historical exposure to asbestos of CSX employees is
not relevant to either the claims of CSX or the lawyer defendants.
Even if there is some slight relevance, it is outweighed by the
danger of unfair prejudice and unnecessary use of time.
The
response of the lawyer defendants to this motion makes it clear
that while asserting that they want only to “explain to the jury
all the bases on which the claims were founded, so that the jury
can properly evaluate that the claims were meritless,” they make it
clear that they wish to go further and illustrate, apparently in
some detail, the history of CSX and its predecessors with respect
to
the
knowledge
of
asbestos
dangers
and
the
treatment
of
employees, including the claimants at issue, and the history of
other claims filed against CSX.
This includes “historical use of
asbestos on the railroad without warning to employees.”
Even if
the lawyer defendants had all of this same historical information
as developed through discovery, there is no showing that the lawyer
defendants would not have had a good faith basis for bringing the
claims involved in this civil action.
This kind of detailed
historical evidence is not necessary for the lawyer defendants’
22
good faith basis for bringing these suits. Simply showing that the
lawyer defendants knew that CSX products contained asbestos and
that their particular clients were employed by CSX and likely
exposed to asbestos would, along with other information that the
lawyer defendants appear to have obtained from their clients prior
to filing suit, be enough to establish a good faith basis for
filing the lawsuits.
As noted by CSX, this is a fraud case and not
a FELA case against CSX.
The lawyer defendants can certainly show
the reasons why they had a good faith basis for bringing the claims
in issue without further going into the lengthy history of asbestos
use which, as this Court stated, is not relevant and even if
marginally relevant, is nevertheless inadmissible under Federal
Rule of Evidence 403.
b.
Evidence regarding alleged asbestos usage not related to
the time periods, work locations and crafts of the claimants at
issue -- DEFERRED.
CSX next wishes to exclude evidence regarding alleged asbestos
usage not related to the time periods, work locations, and crafts
of the claimants at issue.
CSX believes the defendants will
attempt to introduce such evidence in an attempt to show that the
lawyer defendants did have a basis to believe Mr. Baylor and the
other claimants were exposed to asbestos during their employment
with CSX.
relevant,
CSX argues that, to the extent that such evidence is
it
is
only
relevant
as
23
it
pertains
to
the
eleven
claimants at issue and the times and places where they actually
worked.
CSX further argues, that such evidence should be excluded
pursuant to Fed. R. Evid. 403 because it will be misleading to the
jury and unfairly prejudicial to CSX.
Finally, CSX argues that if
the lawyer defendants do introduce the evidence, there must be an
adequate foundation showing that any such exposure was significant
enough to actually cause asbestosis.
The
lawyer
defendants
argue
that
they
are
entitled
to
introduce evidence and argue about potential asbestos exposure for
the eleven claimants at issue based on what the lawyer defendants
knew or reasonably believed at the time of filing, including
general knowledge of the use of asbestos by CSX.
The lawyer
defendants assert that the evidence is relevant and admissible.
Further, they assert that CSX should be required to make objections
to specific exhibits or testimony so that this Court can, in
context, properly evaluate them on an individual basis. The lawyer
defendants argue that the citations to case law provided by CSX for
their contentions are inappropriate as they do not involve the same
type of cases as the current case.
This Court believes that it is premature to grant this motion
in limine as constructed by CSX as this Court is not able to
ascertain at this time the type of evidence the lawyer defendants
seek to introduce to show their good faith basis in bringing the
eleven claims at issue.
While it may indeed be shown at trial
24
that, as proposed by CSX, only evidence of asbestos usage related
to the time periods, work locations and crafts of the eleven
claimants is at issue, this Court is not willing or able at this
pretrial stage to make that decision.
c.
Evidence of other claims or settlements as proof that any
particular asbestos claim against CSX has merit -- GRANTED AS
FRAMED.
CSX requests that this Court preclude the lawyer defendants
from admitting evidence of other claims or settlements as proof
that any particular asbestos claim against CSX had merit.
CSX
believes that the lawyer defendants will argue that the existence
and settlement of these other claims is circumstantial evidence
that the eleven claims at issue were not fraudulent.
CSX states
four specific reasons why such evidence should not be admitted.
First,
CSX asserts that the existence of other claims fails to
show anything beyond the fact that the defendant has been sued and
is therefore not evidence that any particular claim has merit.
Second, CSX asserts that if the other claims are probative of the
merits at issue, the defendants would still need to show that the
other claims were “substantially similar” to the claims at issue,
which CSX argues they are not.
Third, CSX contends that if the
evidence of the other claims is admitted for the purpose of
establishing that the claims at issue were not fraudulent, then CSX
must be permitted to show that the other claims against it were
25
bogus.
Fourth, CSX argues that insofar as the settlement of other
claims is at issue, Fed. R. Evid. 408 expressly states that
settlements and offers of settlement are not admissible on behalf
of any party to prove or disprove the validity or amount of a
disputed claim. CSX further states that, not only is such evidence
irrelevant, its presentation would also draw out trial and cause
undue delay.
The
lawyer
defendants
respond
by
stating
that
they
are
entitled to compare the Peirce Firm’s FELA practice (including
settlement history with CSX) with similarly situated law firms and
other claims and settlements to show a lack of fraud and lack of
justifiable reliance in that, among other things, CSX was making
informed business decisions rather than being victimized by alleged
fraud.
The lawyer defendants argue that the evidence is relevant.
They contend that by demonstrating that the Peirce Firm was one of
several firms advocating on behalf of railroad workers that were
involved in essentially the same kind of relationship with CSX, the
lawyer defendants can show that their alleged conduct was not
fraudulent.
The lawyer defendants state that they are not using
the evidence to prove CSX’s ultimate liability on the eleven claims
at issue or their liability in the present case, which might
implicate Fed. Rule Evid. 408.
contend
that
they
are
using
Instead, the lawyer defendants
the
evidence
accusations of fraud, not to prove liability.
26
to
defend
against
Further, the lawyer
defendants state that the production of such evidence will not
result in mini-trials or rather undue delay, as it can be reduced
to relatively simple numeric formats, or that which is already in
deposition testimony.
Despite the lawyer defendants’ contentions that they should be
allowed to show other claims including settlements to “fully
explain the nature of the relationship between the Peirce Firm and
CSX, as well as discuss both the litigation relationship that the
Peirce Firm had with other railroads in FELA litigation and the
litigation relationship that CSX had with other law firms in FELA
litigation,” this Court is concerned about allowing a widespread
production of the many lawsuits that involved CSX including the
Peirce law firm.
This Court will allow the lawyer defendants to
show such evidence in the context of showing how the Peirce law
firm operates, particularly with cases involving CSX.
This can be
accomplished without opening a discussion of particular lawsuits.
This Court directs that before offering such evidence, the Court
and the parties confer as to the approach to be taken.
However,
this Court believes that any such evidence, if allowed, should be
limited so that any probative value would not be substantially
outweighed by including but not limiting the danger of confusing or
misleading the jury.
27
d.
Evidence
or
argument
concerning
CSX’s
tort
reform
initiatives and/or argument that this case is an attempt to
eliminate asbestos litigation -- GRANTED.
CSX next argues that evidence or argument concerning CSX’s
tort reform initiatives and/or argument that this case is an
attempt
to
eliminate
asbestos
litigation
should
be
excluded.
Specifically, CSX contends that inquiry into or speculation about
CSX’s motives for its action would be unfairly prejudicial, along
with the fact that such evidence would not assist a jury in
resolving the issues in this case.
The lawyer defendants contend
that they are entitled to introduce evidence of CSX’s tort reform
initiatives because it is relevant evidence demonstrating lack of
reasonable reliance and because it demonstrates motive for CSX’s
fraud as pled in the counterclaims.
The lawyer defendants contend
that the case law cited by CSX is not relevant to this case as none
of the case law involves fraud claims.
After reviewing the contentions of the parties concerning this
motion, this Court asserts that any such evidence of so-called
“tort reform” initiatives or motives is not relevant to the
resolution of the issues in this action.
Parties on both sides of
the litigation have the right to argue for or against changes in
the law, not only in the law of torts but in every other field of
law as well.
This applies to the plaintiff and the defendants and
lawyers and associations representing such parties.
28
Such evidence
is not relevant and even if there were some relevancy for the
limited reasons argued by the lawyer defendants, such slight
probative value would be substantially outweighed by the dangers
addressed in Fed. R. Evid. 403 including, but not limited to,
confusion of the issues and needlessly presenting of cumulative
evidence.
e.
Media coverage regarding this case or the underlying
asbestos litigation -- GRANTED.
CSX
next
argues
that
this
Court
should
preclude
the
introduction of newspaper articles, internet information, videos,
or other media coverage dealing with this case or any of the
underlying asbestos litigation. CSX contends that such evidence is
irrelevant, prejudicial, and improper hearsay without an exception.
The lawyer defendants respond by stating that they should be
entitled to introduce evidence such as CSX’s own statements in the
media about FELA litigation or its conduct in this case, as it is
evidence of CSX’s lack of reasonable reliance and evidence of CSX’s
motive in attempting to carry out its fraudulent activity as
alleged in the counterclaims.
Specifically, the lawyer defendants
state that the evidence is relevant to show that CSX was never
deceived as to any aspect of the claims brought against it, but
rather had a business model that entailed settling claims as a
predictable business expense.
Further, the lawyer defendants
29
contend that such evidence is not hearsay as it is not going to be
offered to prove the truth of the matter asserted.
This Court believes that there is no appropriate basis for
allowing such evidence. The evidence is not relevant to a decision
on the various issues asserted in this civil action and any
relevancy is substantially outweighed under Fed. R. Evid. 403 by
the danger of, among other things, confusing the issues and
needlessly
presenting
cumulative
evidence.
Such
evidence
is
probably inadmissible hearsay and even if the evidence is not, as
the lawyer defendants claim, offered for the truth of the matter
asserted, such evidence must still be relevant which, for the
reasons set forth above, it is not.
f.
Evidence or argument that CSX had or did not have
insurance coverage for asbestos claims -- DENIED.
CSX claims that this Court should preclude the defendants from
introducing evidence or argument regarding any insurance coverage
that CSX may or may not have had for asbestos claims or any other
type of litigation.
CSX claims that such evidence is not relevant
to whether or not the defendants conspired to commit fraud.
Further, CSX contends that such evidence should be excluded under
Fed. R. Evid. 403 as the introduction of such evidence would be
time consuming and confusing to the jury.
The lawyer defendants
respond by stating that they are entitled to refer to CSX’s
insurance coverage for FELA claims, and CSX’s positions taken in
30
disputes with those insurers, because such evidence is related to
and cannot be separated from their defenses in this action.
Specifically, the lawyer defendants state that such evidence is
relevant evidence to demonstrate that CSX has taken positions in
arbitration that are at odds with its own expert’s opinion in the
present case.
Further, the lawyer defendants state that they
should not be deprived of such evidence simply because it comes out
of a dispute that involved insurance companies.
This Court agrees with the lawyer defendants that, to the
extent that positions taken by CSX in the arbitration proceedings
would be admissible as party admissions under Fed. R. Evid.
801(d)(2), they may be used without the need to relitigate the
arbitration proceeding itself or to get into whether CSX has
insurance coverage.
Such evidence seems to be an appropriate part
of the lawyer defendants’ defense.
g.
Evidence
or
argument
regarding
any
litigation
or
arbitration between CSX and its insurers -- GRANTED IN PART and
DENIED IN PART.
CSX argues that the defendants should be precluded from
referencing any disputes between CSX and its insurers over coverage
for asbestos-related claims.
CSX anticipates that the defendants
will attempt to introduce or use the insurers’ allegations from the
1999 arbitration as proof that CSX purportedly settled claims
without sufficient documentation. CSX, however, states that it has
31
no
objection
to
otherwise
permissible
uses
of
deposition
transcripts of the 1999 arbitration proceedings so long as those
transcripts
are
proceedings.
used
without
reference
to
the
arbitration
The lawyer defendants’ response is the same as that
found in section 3.f.
To the extent that the lawyer defendants may use statements by
CSX during the arbitration proceeding and party admissions under
Fed.
R.
Evid.
801(d)2),
such
statements
should
be
allowed.
Plaintiff acknowledges that it has no objection to any permissible
use of deposition transcripts from the 1999 arbitration proceedings
so long as those transcripts are used without reference to the
arbitration proceeding but apparently does not wish such statements
to be used “for other, more substantive purposes.”
Such proposed
limitation by CSX is without merit. The Court may wish to consider
a limiting instruction so that the jury is not mislead into
believing insurance coverage for any liability in this case is
involved.
Counsel may wish to meet and confer concerning a
proposed trial limiting instruction.
h.
Any
comment
or
argument
regarding
the
dismissal
of
certain parties or the fact that certain parties were not named as
defendants -- DENIED AS MOOT WITH MODIFICATION.
CSX
requests
that
this
Court
exclude
any
reference
to,
speculation about, or comment on the fact that certain parties or
individuals are not parties to this lawsuit or have been dismissed.
32
CSX argues that such evidence is commentary and inadmissible under
Fed. R. Evid. 408, irrelevant under Fed. R. Evid. 401, and unfairly
prejudicial under Fed. R. Evid. 403. Specifically, CSX argues that
under Fed. R. Evid. 408 the defendants should be precluded from
arguing that CSX’s settlement and/or dismissal of defendant Mark
Coulter has any relevant to the validity of CSX’s claims against
the remaining defendants.
Further, CSX wishes to prevent the
defendants from arguing that CSX’s claims lack merit because CSX
did not chose to name every conceivable participant in the lawsuit,
as CSX considers this evidence irrelevant, highly prejudicial, and
confusing for a jury.
The lawyer defendants assert that the “parties are essentially
in agreement on this point” only adding that the lawyer defendants
“do reserve the right to argue that CSX’s evidence must be analyzed
and proved with respect to the two specific individuals sued, not
the Peirce Firm collectively, and there must be individual evidence
of fraud.”
i.
This Court agrees that modification would be proper.
Evidence or argument concerning the amount any party has
spent in the prosecution or defense of this case -- GRANTED BY
AGREEMENT.
Because this Court has already held that information regarding
CSX’s current attorneys’ fees is not relevant at trial, CSX argues
that the same analysis necessarily holds true with respect to the
lawyer defendants’ attorneys’ fees in this case.
33
Therefore, CSX
argues that evidence or argument that the amount any party has
spent in the prosecution or defense of this case should be excluded
because it is irrelevant.
The lawyer defendants agree to abide by
this Court’s prior orders on this topic but wish to preserve their
objection on the record.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:
December 6, 2012
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
34
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