Court Opinion

ID: 9557884
Source: CourtListenerOpinion
Date Created: 2023-08-21 16:59:26.92413+00
Date Added: 2024-06-11T09:07:39.400904
License: Public Domain

HOLMES, Circuit Judge,
dissenting in part and concurring in part.
The majority elevates form over substance in concluding that Rule 16 was the foundation for the district court’s exclusion of Professor Fischel’s expert testimony. Daubert was at the heart of the district court’s decision, and Mr. Nacchio was on clear notice of this fact. The court did not abuse its discretion in finding that Mr. Nacchio did not carry his burden under Daubert of establishing the admissibility of Professor Fischel’s testimony. Accordingly, I respectfully dissent from Section 11(A) of the majority’s opinion. I concur with the majority’s conclusion that Mr. Nacchio failed to establish grounds for reversal in the district court’s exclusion of classified information and in its instructions to the jury. I also believe the evidence was legally sufficient to support the jury’s verdict. Therefore, I would affirm the district court and uphold Mr. Nacchio’s conviction.1
The district court’s exclusion of Professor Fischel’s testimony was about Daubert. True, the government first framed its challenge to Professor Fischel’s proffered expert testimony as an objection to the sufficiency of Mr. Nacchio’s Rule 16 disclosure. However, by the time the district court ruled to exclude Professor Fischel’s testimony, it was clear that the court was asking about Daubert.
The district court had repeatedly questioned Professor Fischel’s methodology— an issue that it must examine under Daubert, not Rule 16. Thus, Mr. Nacchio should have known that he had to either make the requested showing or request a Daubert hearing.2 Furthermore, it was incumbent upon Mr. Nacchio, who was offering Professor Fischel as an expert witness, to demonstrate that his proffered expert was qualified to render an expert opinion. Thus, when the district court was asking about methodology, Mr. Nacchio was required to rise to meet his burden of demonstrating that the expert testimony was admissible.
*1171Mr. Nacchio is attempting to take an unexceptional issue and craft it into a tale of an invidious district court ruling. However, it is clear that at best his argument is nothing more than a run-of-the-mill claim of unfair surprise clothed in Rule 16. We have dismissed similar claims when, as here, the record belies them. See Ralston v. Smith & Nephew Richards, Inc., 275 F.3d 965, 970 n. 4 (10th Cir.2001) (rejecting the contention that a party was not informed that her expert’s qualifications would be at issue when, inter alia, a section of a motion in opposition to the expert raised the issue of the expert’s qualifications); see also Solorio v. United States, 85 Fed.Appx. 705, 707-10 (10th Cir.2004) (rejecting “essentially a claim of unfair surprise arising from the district court’s exclusion of [ ] expert[ ] testimony” when, inter alia, “[t]he government’s reply brief mounted an explicit Daubert attack” on the expert’s reliability).
Mr. Nacchio was on notice that Professor Fischel’s qualifications were at issue. As early as the government’s first motion regarding Professor Fischel, the government argued that Rule 702 was implicated. Supp.App. at 39. At a March 22, 2007 hearing, both the government and the court raised the concern that there could be issues arising from the Daubert line of cases. Mr. Nacehio’s counsel responded, “forewarned is forearmed.” App. at 2042.
One week following this exchange, Mr. Nacchio provided his revised expert disclosure, and again, the government responded by raising Daubert concerns. The government filed a 63-page motion to exclude Professor Fischel’s expert testimony based on deficiencies in the Rule 16 disclosure and based on Mr. Nacchio’s failure to meet his burden to demonstrate that Professor Fischel’s testimony was admissible. See App. at 363. The government argued that, in addition to Rule 16, there were numerous grounds for excluding Professor Fischel’s testimony, including Rules 401, 403, 602, 702, and 703 of the Federal Rules of Evidence.
When Mr. Nacchio responded to this motion the next day, in substance, he addressed Daubert issues in discussing Rule 702 and Professor Fischel’s qualifications.3 See App. at 463-68. Thus, as of his response on April 4, Mr. Nacchio was not only on notice that Daubert was in play, but he also had responded to the Daubert issues.
The following day (April 5), when Mr. Nacchio called Professor Fischel to the stand, he still had not met his burden of demonstrating that Professor Fischel’s testimony was admissible. In particular, Mr. Nacchio had not even mentioned yet the possibility of a Daubert hearing. As the party offering the expert, Mr. Nacchio “bore the burden of demonstrating to the district court that [his proffered expert] *1172was qualified to render an expert opinion.” Ralston, 275 F.3d at 970 n. 4. See also Fed.R.Evid. 702 advisory committee’s note (“[T]he proponent has the burden of establishing that the pertinent admissibility requirements are met by a preponderance of the evidence.”).
The district court made a ruling excluding that testimony because Mr. Nacchio had not met his burden of demonstrating admissibility. The Majority’s contrary reading of the transcript misses the mark: The district court cannot reasonably be said to have “excluded the evidence on Rule 16 grounds alone.” Maj. Op. at 1153. This conclusion is particularly problematic in light of the Supreme Court’s recent ruling in Sprint/United Management Co. v. Mendelsohn, No. 06-1221, 552 U.S. -, 128 S.Ct. 1140, 170 L.Ed.2d 1 (2008). There, the Court instructed: “An appellate court should not presume that a district court intended an incorrect legal result when the order is equally susceptible of a correct reading, particularly when the applicable standard of review is deferential.” Sprint/United Mgmt. Co., 128 S.Ct. at 1146. Here, we have a deferential standard of review, see id. at 1145 (noting that there is broad discretion granted to a district court’s evidentiary rulings), and a district court ruling that can be interpreted as coming to a correct legal result.4 Accordingly, we should not presume that the district court erred in this way.
A fair reading of the district court’s ruling indicates that Daubert was the driving force behind that decision. At that time, Mr. Nacchio had not demonstrated the admissibility of Professor Fischel’s testimony. Because Mr. Nacchio bore that burden, he “cannot now complain that [ ]he was unprepared to attend to h[is] burden.” Ralston, 275 F.3d at 970 n. 4. Yet, this is essentially what Mr. Nacchio’s argument boils down to.5
*1173On April 9, the date that Professor Fischel — Mr. Nacchio’s last witness — finished testifying as a summary witness, Mr. Nacchio requested a Daubert hearing for the first time. In a footnote of a motion to permit Professor Fischel to provide expert testimony to rebut two government witnesses, Mr. Nacchio asked the court to reconsider its ruling excluding Professor Fischel’s expert testimony and noted that “[a]n evidentiary hearing is particularly appropriate” in situations where the court finds a report to be insufficiently detailed. App. at 481 n. 4. Even here, Mr. Nacchio failed to address the key concern that the district court had previously highlighted in excluding Professor Fischel’s testimony— his methodology for this particular case.
Neither the government nor the district court was under any obligation to call for a hearing or to prod Mr. Nacchio to supplement his filings. The majority suggests that the district court should have ordered Mr. Nacchio to make a Daubert proffer. Maj. Op. at 19, 21. However, we have never required a district court to inquire about Daubert issues.6 Rather, as the proponent of the expert testimony, the admissibility burden of proof rested solely on Mr. Nacchio, and he had a multitude of opportunities to provide more information or even simply to request a hearing. He failed to do any of this. Furthermore, the district court clearly indicated on numerous occasions that it was concerned about Professor Fischel’s methodology. Although the court did not specifically order a Daubert proffer, through its repeated questions on methodology, it effectively invited Mr. Nacchio to make one. The district court, which has great discretion in deciding what procedures to use in acting as gatekeeper, see Rodriguez-Felix, 450 F.3d at 1122, should not now be held to have erred because Mr. Nacchio failed to accept its invitation to alleviate its Daubert concerns.
Mr. Nacchio’s attempt to focus this court’s attention on Rule 16, which certainly did not require him to demonstrate admissibility, should be unavailing. Daubert was the issue, and Mr. Nacchio failed in his Daubert obligation to establish the admissibility of Professor Fischel’s testimony.
A district court’s application of the Daubert standard is reviewed for abuse of discretion. United States v. Rodriguez-Felix, 450 F.3d 1117, 1122, 1125 (10th Cir.), cert. denied, — U.S.-, 127 S.Ct. 420, 166 L.Ed.2d 297 (2006). The party offering the expert “must show that the method employed by the expert ... is scientifically sound and that the opinion is based on facts which satisfy Rule 702’s reliability requirements.” Dodge v. Cotter Corp., 328 F.3d 1212, 1222 (10th Cir.2003). See also Ralston, 275 F.3d at 970 n. 4; *1174Fed.R.Evid. 702 advisory committee’s note. The district court has broad discretion in determining how to assess an expert’s credibility. E.g., Rodriguez-Felix, 450 F.3d at 1122. The exclusion of an expert is not overturned “unless it is arbitrary, capricious, whimsical or manifestly unreasonable or when we are convinced that the district court made a clear error of judgment or exceeded the bounds of permissible choice in the circumstances.” Champagne Metals v. Ken-Mac Metals, Inc., 458 F.3d 1073, 1079 (10th Cir.2006) (quoting United States v. Gabaldon, 389 F.3d 1090, 1098 (10th Cir.2004)).
Before allowing expert testimony, the district court must satisfy itself that the proffered testimony is both relevant and reliable. See, e.g., Rodriguez-Felix, 450 F.3d at 1122; United States v. Fredette, 315 F.3d 1235, 1239 (10th Cir.2003). “The touchstone for relevance, in this context, is whether ‘the evidence or testimony [will] assist the trier of fact to understand the evidence or to determine a fact in issue.’ ” Gabaldon, 389 F.3d at 1098 (quoting Daubert, 509 U.S. at 591, 113 S.Ct. 2786). In making a reliability determination, “[generally, the district court should focus on an expert’s methodology rather than the conclusions it generates.” Dodge, 328 F.3d at 1222.
As to relevance, the district court stated that much of Professor Fischel’s testimony was nothing but argument based on factual matters before the court, a summary of stock sales and prices, and issues within the common knowledge of the jury. Such reasons for excluding expert testimony are perfectly reasonable and, indeed, have been upheld by this court. See Gabaldon, 389 F.3d at 1099 (upholding the exclusion of expert testimony when it was “not something for which expert testimony is needed”); Fredette, 315 F.3d at 1240 (upholding the exclusion of expert testimony when it “did not deal with matters outside the everyday knowledge of a typical juror”). Furthermore, the district court noted that some evidence was completely irrelevant. For example, Professor Fischel was set to testify regarding what Michael Eisner and Michael Dell were doing with stock in their companies when Mr. Nacchio was selling his stock. In sum, the district court’s conclusions are not so unreasonable that they exceeded permissible choice. It was certainly permissible for the district court to conclude that this evidence was not relevant.
The district court could have excluded Professor Fischel’s testimony on grounds of relevance alone, but the court also noted concerns regarding Professor Fischel’s methodology. The majority “conclude[s] that at a minimum it is an abuse of discretion to exclude an expert witness because his methodology is unreliable without allowing the proponent to present any evidence of what the methodology would be.” Maj. Op. at 23-24. However, the record clearly establishes that Mr. Nacchio proffered information concerning Professor Fischel’s methodology.7 Indeed, Mr. Nac*1175chio’s counsel admitted as much. Oral Arg. at 47:19-47:48 (responding to a question about what methodology had been provided, Mr. Nacchio’s attorney indicated: “He described in detail — at least ten pages of detail.... There’s ten pages that’s nothing but that.”). Accordingly, by Mr. Nacchio’s own admission, the district court had information about methodology in front of it when ruling on the issue.
In the “ten pages” of methodology offered by Mr. Nacchio, it is indicated that Professor Fischel was basing his opinion on his analysis of, inter alia, market and stock-related information. This indicates that Professor Fischel was applying his experience to material that he reviewed to formulate an opinion. A witness’s testimony can rely solely on experience. However, when that is the case, “the witness must explain how that experience leads to the conclusion reached, why that experience is a sufficient basis for the opinion, and how that experience is reliably applied to the facts.” Fed.R.Evid. 702 advisory committee’s note. Mr. Nacchio did not offer any of that additional information. “The trial court’s gatekeeping function requires more than simply taking the expert’s word for it.” Id. (internal quotation marks and citation omitted). “[NJothing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence that is connected to existing data only by the ipse dixit of the expert.” Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146, 118 S.Ct. 512, 139 L.Ed.2d 508 (1997).
Mr. Nacchio seems to rely on Professor Fischel’s qualifications to tip the balance in favor of the admissibility of his testimony. In doing so, he ignores that when assessing expert testimony, “the question before the trial court [i]s specific, not general.” Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 156, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999). Although Professor Fischel generally has been allowed to testify in the past and a district court might well respect his credentials, it has an obligation to assess the methodology that Professor Fischel has employed in the case at hand and whether he has specialized knowledge that can assist the jurors in that case. See id. at 153-56, 119 S.Ct. 1167; Rodriguez-Felix, 450 F.3d at 1122; Fredette, 315 F.3d at 1239-40. Mr. Nacchio could not just assume that his expert would be admitted because his testimony was allowed in other cases; he had to meet his burden of demonstrating admissibility in this particular case. As the district court noted, Mr. Nacchio “made no attempt” to do this. App. at 3915.
Mr. Nacchio failed to satisfy the district court that Professor Fischel’s testimony would be either reliable or relevant. The district court was well within its discretion in excluding Professor Fischel’s expert testimony. See Rodriguez-Felix, 450 F.3d at 1125 (finding no abuse of discretion when the district court excluded testimony based on the “woefully inadequate” report regarding proffered testimony).
Of course, I would find it troubling if a district court unilaterally used a ruling *1176regarding the propriety of a Rule 16 disclosure to effectively exclude an expert witness on Daubert grounds — -without any notice to the party offering the expert. But that is not what happened here. Mr. Nacchio had ample notice that the methodology underlying Professor Fischel’s opinion (i.e., a Daubert question) was at issue and bore the burden of demonstrating that the testimony was admissible. He easily could have requested a hearing or fully addressed the issue in briefing. Mr. Nacchio failed to do so. Consequently, there is no foundation to his claim for a new trial.
I respectfully dissent and would affirm Mr. Nacchio’s conviction.

. In addition to challenging his conviction, Mr. Nacchio raised certain challenges to his sentence. I offer no views regarding the merits of those sentencing challenges.

. I agree with the majority that Daubert is "legal shorthand for the district court's obligation to test a proposed expert’s methodology in advance of his testimony.” Maj. Op. at 1149. Logically, it should follow, then, that a district court’s repeated probing as to the sufficiency of an expert’s methodology, as here, would put an expert witness’s proponent on notice that Daubert was at issue.

. The majority states that Mr. Nacchio made no mention of Daubert or Professor Fischel’s methodology in this filing. Maj. Op. at 1149— 50. Although technically correct that the word “Daubert” is not included, this is one example of how the majority elevates form over substance. Mr. Nacchio's filing contains a section with the heading: "Professor’s Opinions Are Proper Under Rule 702.” App. at 466. In that section, Mr. Nacchio discusses the "specialized knowledge” that Professor Fischel will purportedly bring to the jury and the analytic approach toward the stock and "other financial data” he has taken to "formulate opinions” (i.e., his methodology). Id. Thus, contrary to the majority's assertion, Mr. Nacchio’s filing did address Daubert and Professor Fischel's methodology. See Daubert v. Merrell Dow Pharms., 509 U.S. 579, 588, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) ("Here there is a specific Rule that speaks to the contested issue. Rule 702, governing expert testimony,....”). In short, the substance of this filing underscores Mr. Nacchio’s awareness that Daubert was in play.

. For example, after stating that Professor Fischel's testimony could be excluded on a number of grounds, the district court said: "Most convincingly, the defendant has made no attempt to comply with Rule 702 or Daubert and establish that Fischel's testimony is the product of reliable principles and methods or that Fischel applied some principles and methods reliably in this case." App. at 3915. The district court then stated: "Rule 702 governs this issue.” Id. This indicates that Rule 702 was the main rationale for the district court's decision.
As support for its interpretation of the record, the majority cites to two parts of the district court's ruling. Maj. Op. at 15. In the first instance, the district court only refers generically to "disclosures” after outlining the contents of the government’s motion and indicating it had also read both Mr. Nacchio’s Rule 16 disclosure and his reply to the government's motion. App. at 3914. In the second instance, the district court stated that methodology was undisclosed "in this expert disclosure.” App. at 3917 (emphasis added). However, the district court’s previous discussion did not refer to the Rule 16 disclosures. Instead, the district court had just quoted Mr. Nacchio's argument — made in his reply to the government’s motion to exclude the testimony — that Professor Fischel’s opinions were proper under Rule 702. Compare App. at 3916 with App. at 466.
At best, the majority has pointed out two ambiguous references to a "disclosure” that arise in the context of the district court’s assessment of the sufficiency of Mr. Nacchio’s Daubert arguments. “When a district court's language is ambiguous, as it was here, it is improper for the court of appeals to presume that the lower court reached an incorrect legal conclusion.” Sprint/United Mgmt. Co., at 1145. Although a fair reading of the district court's decision demonstrates that the basis for the ruling was Daubert, the Supreme Court’s recent guidance further compels the conclusion that it is not proper for us to assume that the district court was basing this ruling on Rule 16.

. The majority states that we should not "penalize” a party for failing to present an argument "[wjhen the court does not allow the lawyer” to present it. Maj. Op. at 1154. However, this contention is based on one exchange between Mr. Nacchio's counsel and *1173the district court following the court’s ruling to exclude Professor Fischel’s testimony and ignores the ample opportunities that Mr. Nacchio previously had to respond. Indeed, it ignores the written response that Mr. Nacchio had already made discussing Rule 702 and Professor Fischel's qualifications. Although Mr. Nacchio may have been on a tight deadline, he never requested a continuance or even a Daubert hearing before he called Professor Fischel to the stand. Both of these requests would have been rather simple and certainly would not have required much time at all. Yet, Mr. Nacchio failed to make either request.

. The majority also states: “The prosecution had every right to demand a Daubert hearing to test his methodology.” Maj. Op. at 1152. Although it is true that the prosecution could have demanded .a hearing, it was likewise under no obligation to do so. In a proffer of expert testimony, the burden is on the party offering the testimony. In this case, that burden was on Mr. Nacchio. Accordingly, when it became apparent that the district court was not convinced that Professor Fischel’s testimony was admissible, Mr. Nacchio — not the prosecution — should have requested a Daubert hearing.

. Without any legal support, the majority suggests that a district court cannot make a Daubert ruling without hearing testimony or receiving submissions. Maj. Op. at 1153-54. However, we have never required a district court to sua sponte request either a hearing or more submissions and certainly no obligation of that sort would appear to exist in the Daubert context. Indeed, we have repeatedly held that "[t]he district court retains broad discretion in deciding how to assess an expert's reliability, including what procedures to utilize in making that assessment, as well as in making the ultimate determination of reliability.” Rodriguez-Felix, 450 F.3d at 1122 (emphasis added) (citing Dodge, 328 F.3d at 1223). Contrary to the majority's contention, there was information before the district court on the question for decision- — whether Professor Fischel's proffered expert testimony satisfied Daubert. Mr. Nacchio had submitted filings regarding Rule 702 and at least ten pages of methodology that the district court *1175did review before excluding Professor Fischel's testimony. Furthermore, we place the burden on the party offering the expert testimony to demonstrate admissibility. Ralston, 275 F.3d at 970 n. 4. See also Fed.R.Evid. 702 advisory committee’s note. Accordingly, it was incumbent upon Mr. Nacchio to make the appropriate submissions, through a requested Daubert hearing or otherwise — particularly given that the district court had been drawing his attention to its concern over methodology. In other words, insofar as there were any gaps in the record before the district court when it made its Daubert ruling, Mr. Nacchio must be held responsible for them and should bear the adverse consequences of not filling them.