Opinion ID: 783732
Heading Depth: 2
Heading Rank: 1

Heading: Marsh's Proffered Expert Testimony

Text: 47 Lehman Brothers first challenges the district court's rejection of Marsh's proffered expert testimony. Federal Rule of Civil Procedure 702 allows for expert testimony, providing: 48 If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case. 49 Fed.R.Civ.P. 702. 50 In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), the Supreme Court held that the district court must perform a gatekeeping function to determine whether expert scientific evidence is admissible under Rule 702. Id. at 593-95, 113 S.Ct. 2786. See also Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 141, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999) (extending Daubert to other non-scientific types of expert testimony). To determine admissibility under Rule 702, the Daubert Court announced five factors that may be used in assessing the relevancy and reliability of expert testimony: (1) whether the particular scientific theory can be (and has been) tested; (2) whether the theory has been subjected to peer review and publication; (3) the known or potential rate of error; (4) the existence and maintenance of standards controlling the technique's operation; and (5) whether the technique has achieved general acceptance in the relevant scientific or expert community. Daubert, 509 U.S. at 593-94, 113 S.Ct. 2786. However, as the Court clarified in Kumho, this list is neither definitive nor exhaustive, but rather flexible to account for the various types of potentially appropriate expert testimony. Kumho, 526 U.S. at 141, 119 S.Ct. 1167. In reviewing the district court's decision concerning the admissibility of an expert's testimony, we review de novo whether the district court properly followed the Daubert framework. Walker v. Soo Line R. Co., 208 F.3d 581, 590 (7th Cir.2000). And if the district court properly applied Daubert, we review the court's decision to admit or exclude expert testimony only for an abuse of discretion. Id. In this case, in rejecting Marsh's testimony during the November 21, 2002 hearing, the district court provided only two reasons: (1) that Lehman Brothers has not demonstrated that this testimony is based upon any fundamental set of principles; and (2) that Marsh has failed to accurately recount her credentials, and in particular, the fact that her testimony has been previously rejected in court. However, the district court also stated that it would set forth in particularity the other reasons why [the court was] rejecting this testimony. The district court did that in its later-issued written order, listing seven reasons: (1) Marsh could not identify a set of scientific principles or standards that she applied in this case; (2) she did not adequately explain the inconsistencies in her reasoning process, which led to her conclusion that Deputy's signatures were genuine; (3) Marsh's report stated that she was able to conclude that the July 26, 2001 signature was genuine, while at the same time stating she could not reach a conclusion as to the July 26, 2001 signature; (4) Marsh admitted that she did not ask to see the original documents in forming her opinion and that she received and used facsimile copies; (5) she admitted on September 20, 2002 that she could not render an opinion on the four documents, but changed her mind on September 24, 2002, after seeing Deputy's affidavit; (6) Marsh acknowledged the absence of Deputy's middle initial in one of the document as well as variations in the name Deputy; (7) Marsh [was] less than candid regarding her testimony in Malachinski v. C.I.R., 268 F.3d 497 (7th Cir.2001), a case which is listed on her record of court testimony.... [in which] the court found Marsh's report did not adequately set forth the facts and reasons supporting Marsh's conclusions. 51 Most of these seven stated reasons concerned issues of credibility and persuasiveness, but such considerations are relevant only in valuing the testimony, not in determining its admissibility. As we explained in Smith v. Ford Motor Co., 215 F.3d 713, 719 (7th Cir.2000), [i]t is not the trial court's role to decide whether an expert's opinion is correct. The trial court is limited to determining whether expert testimony is pertinent to an issue in the case and whether the methodology underlying that testimony is sound. See also, id. (whether an expert's theory is correct is a factual question for the jury to determine). For instance, as its third reason for rejecting Marsh's testimony the district court noted that Marsh's expert report contradictorily stated that the July 26, 2001 signature was genuine, but in the same report stated that her analysis was inconclusive as to the July 26, 2001 signature. At the hearing, however, Marsh explained that the inconsistency was merely a typographical error, and that the report should have stated that the review of the June 4, 2001 statement was inconclusive. A typographical error appearing in an expert report might lead a fact-finder to conclude that the expert is sloppy, but it does not render an expert's opinion unreliable and thus inadmissible. 52 The next rationale offered by the district court concerned Marsh's reliance on facsimile copies. Contrary to the district court's statement that Marsh had not asked to see the originals, Marsh had testified that she always requests the originals. Additionally, Marsh testified that she had qualified her original report on the basis that she did not have access to the originals, but that she had since had an opportunity to view the original and her conclusion remained unchanged. Thus, contrary to the district court's statement, Marsh's expert opinion was not based solely on facsimiles. However, even if it were, the district court did not adequately explore whether experts in the field believe it possible to form an opinion solely from a facsimile, or in this case on the basis of one facsimile and one original copy. Although Marsh testified that facsimiles are less than ideal, and that an original is preferable, she also testified that a handwriting expert could reach a conclusion on the basis of the two samples provided. Whether or not experts in the field would agree, however, is unclear from the record, and that should have been the district court's focus. 53 Similarly, the district court rejected Marsh's testimony because on September 20, 2002, she stated that she could not render an opinion on the four documents, but then changed her mind on September 24, 2002, after seeing Deputy's affidavit. Again, the district court went beyond determining admissibility and focused on credibility. This was error because the focus of the district court's Daubert inquiry must be solely on principles and methodology, not on the conclusions they generate. Cummins v. Lyle Indust., 93 F.3d 362, 368 (7th Cir.1996). Thus, the district court's inquiry should have been on whether professionals in the field of handwriting analysis agree that the addition of a second sample allows for a conclusion as to the validity of the signature at issue. The only testimony before the district court was Marsh's, and she stated that two samples were sufficient in her field to render an opinion. Rather than explore this issue further, the district court in effect found Marsh not credible because she had changed her opinion after obtaining only one additional sample. 3 54 The court's next rationale regarding Marsh's acknowledgment of Deputy's missing middle initial in one of the documents, as well as variations in the name Deputy has no bearing on the Daubert analysis because it merely calls into question the persuasiveness of her opinion, not whether she applied the appropriate expert standards in reviewing the signatures. See United States v. Mooney, 315 F.3d 54, 63 (1st Cir.2002) (Once a trial judge determines the reliability of the proffered expert's methodology and the validity of his reasoning, the expert should be permitted to testify as to the inferences and conclusions he draws from it, and any flaws in his opinion may be exposed through cross-examination or competing expert testimony....). Moreover, in this case Marsh provided an explanation as to these differences, stating that the exclusion of a middle initial is typical and does not indicate that a signature is not genuine. Similarly, Marsh explained that variations exist in everyone's signatures, and that those appearing in the various Deputy signatures were minor variations. A finder of fact might not accept those explanations, but that is a different issue from whether the testimony is admissible in the first instance. See Smith, 215 F.3d at 719. 55 Another reason the district court offered was that Marsh [was] less than candid regarding her testimony in Malachinski v. C.I.R., 268 F.3d 497 (7th Cir.2001), a case which is listed on her record of court testimony.... [in which] the court found Marsh's report did not adequately set forth the facts and reasons supporting Marsh's conclusions. In this regard, the district court doubly erred. First, the district court misread the Malachinski case. In that case, Marsh presented an expert report as to the genuineness of a signature appearing on a tax return, and then at trial was called as a witness. Malachinski v. C.I.R., 1999 WL 349342 (Tax Ct.1999). The Tax Court in that case held that Marsh's live testimony should be limited to the information provided in her expert report based on Tax Court Rule 143(f). (Rule 143(f) prohibits expert testimony beyond that provided prior to trial in an expert report.) On appeal, this court affirmed. Malachinski, 268 F.3d 497. In doing so, although we noted that Marsh's report was conclusory and did not set forth the facts supporting her opinion, this court did not reject her expert testimony; rather we affirmed the Tax Court's application of its rule limiting her testimony to the content of her report. Id. at 501-02. Simply put, Marsh's testimony was not rejected as unreliable under Daubert in Malachinski. Id. Thus, factually the district court clearly erred. Legally, the district court also erred, because its view that Marsh was less than candid regarding her testimony, even if true, 4 at best went to Marsh's credibility and not the admissibility of her expert opinion. 56 The other two reasons given by the district court were that Marsh did not adequately explain the inconsistencies in her reasoning process and that Lehman Brothers has not demonstrated that this testimony is based upon any fundamental set of principles. It is unclear what the district court meant by inconsistencies in Marsh's reasoning process, and in any event, inconsistencies tend to concern credibility. If by inconsistencies in her reasoning process the district court meant that Marsh failed to follow the proper standards required of handwriting experts, that was an appropriate inquiry under Daubert. Marsh did, however, present evidence as to the methodology used by handwriting experts and which she used in this case, and no evidence was presented to dispute her testimony. But in any event, the more fundamental problem in this case is that too much of the district court's analysis involved factors not appropriate under Daubert. The transcript demonstrates that the overriding factor driving the district court's decision was its incorrect reading of Malachinski, and its negative view of Marsh based on its belief that the court in Malachinski had rejected her as an expert and that Marsh had misrepresented that fact to the district court. By incorrectly focusing on Malachinski and other issues relating to credibility, 5 the district court did not properly assess whether handwriting analysis in general, or Marsh's expert opinion in particular, is admissible under Rule 702. Therefore, we must reverse. Cf. Chapman v. Maytag Corp., 297 F.3d 682, 688 (7th Cir.2002) (the record in this case reveals that the district court conducted virtually no Daubert analysis of [the expert's] qualifications in light of these factors, and therefore it erred in admitting the expert's testimony). 57 That does not mean, however, that Marsh's testimony must be admitted. Rather, on remand, the district court must properly function as a gatekeeper pursuant to Daubert and determine whether testimony concerning the genuineness of a signature is properly the subject of expert opinion. This circuit has yet to rule on that issue post- Daubert. Several other circuits and district courts have considered the issue. Every circuit that has considered the issue has allowed expert testimony on handwriting analysis. United States v. Crisp, 324 F.3d 261, 270 (4th Cir.2003); United States v. Jolivet, 224 F.3d 902, 906 (8th Cir.2000); United States v. Paul, 175 F.3d 906, 911 (11th Cir.1999); United States v. Jones, 107 F.3d 1147, 1161 (6th Cir.1997); United States v. Velasquez, 64 F.3d 844, 848-49 (3d Cir.1995). Several district courts, however, have rejected handwriting analysis, finding it lacks scientific reliability. United States v. Hines, 55 F.Supp.2d 62, 68 (D.Mass.1999); United States v. Saelee, 162 F.Supp.2d 1097, 1102-03 (D.Alaska 2001); United States v. Lewis, 220 F.Supp.2d 548, 555 (S.D.W.Va. 2002); United States v. Brewer, 2002 WL 596365 (N.D.Ill.2002). 58 Thus, there appears to be some divergence of opinion as to the soundness of handwriting analysis. However, given that the hearing in this case improperly focused on issues related to credibility, and not the principles and methodology of handwriting analysis, we leave the question of the propriety of such testimony for further review on remand. And after remand, assuming the court properly applies the Daubert standards, any review in this court will be for an abuse of discretion. Walker, 208 F.3d at 581.