Court Opinion

ID: 7006051
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:50:41.496927+00
Date Added: 2024-06-11T16:10:04.361214
License: Public Domain

WALLACE, Circuit Judge,
concurring in the result:
I concur in the majority’s holding that the district court abused its discretion in admitting certain parts of the expert testimony of David Pelham and would reverse on that basis. However, I write separately because I disagree with the majority’s visitation to issues unnecessary for our disposition of this appeal, and I do not join in this dicta. Even if it were not dicta, the analysis used by the majority is too troubling for me to join. In essence, this is a simple case: Pelham’s testimony regarding Korean businessmen and Korean business practices was inadmissible because it was not relevant. The district court abused its discretion, and such testimony, by its very nature, is prejudicial. That ends the matter. Sidestepping the dispos-itive issue of relevancy, however, the majority unnecessarily invades a field of its choice in order to discuss the sensitive and difficult issue of race and ethnicity. This is most troubling because the majority must make its own factual findings of foreign business practices without the aid of a word of evidence in the record. While I am confident my colleagues are convinced that their pronouncements are right and necessary, in truth, they are wholly gratuitous in this case and unnecessary to the decision to reverse.
I
At trial, defense counsel elicited testimony from Pelham concerning the Korean business and regulatory landscape and the proclivity of Korean businessmen for violating restrictive financial regulations by engaging in the sort of illicit transaction alleged in this case. The clear point of this testimony was to associate Jinro with all the other alleged corrupt Korean businesses that allegedly evade Korean currency laws by cloaking speculative investments with legitimate contracts.
Evidence may not be admitted at trial unless it is relevant. Under Federal Rule of Evidence 401, proffered evidence is relevant if it has “any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” “The particular facts of the case determine the relevancy of a piece of evidence.” United States v. Vallejo, 237 F.3d 1008, 1015 (9th Cir.2001).
The problem with Pelham’s testimony is that it was simply not relevant to any issue in this case. As the majority correctly observes, none of Pelham’s testimony was directly connected to Jinro itself, and none *1011was based on personal knowledge of Jinro or this particular transaction. It is a factual question whether a majority of Korean businessmen act in a certain way, but whether that fact is proven or not, it has no relevancy to show that this particular Korean businessman (or company) is that type of a businessman or acted that way in this specific contractual arrangement. No serious effort was made at trial, or in any brief on appeal, to link Pelham’s generalized testimony about Korean businessmen and the Korean financial and regulatory landscape to Jinro or the particular transaction at issue here. Thus, under Rule 401 Pelham’s testimony was irrelevant and inadmissible because it sheds no light on Jinro’s activities in this case. See Fed. R.Evid. 401. Had Jinro attempted to present evidence that the majority of Korean businessmen are ethical and scrupulously honest, relevancy would surely be lacking. The opposite is obviously true also.
The majority never comes to grips with where its own observations lead: Pelham’s testimony about Korean business practices generally were not relevant and, therefore, the case is over. Rather, the majority resuscitates the case by assuming away the dispositive relevancy issue in order to reach more interesting writing. This, I suggest, is not good practice.
It is not enough, of course, that this evidence was improperly admitted. Evi-dentiary rulings are reviewed for an abuse of discretion and will not be reversed absent some prejudice. See Evanow v. M/V NEPTUNE, 163 F.3d 1108, 1113 (9th Cir.1998). Here, the prejudice is readily apparent. This is a classic example of guilt-by-association. As the majority again correctly observes, the thrust of Pelham’s testimony boils down to the following logical syllogism: Korean businesses and businessmen are shady; Jinro is a Korean business with Korean executives; ergo, Jinro is shady. Of course, this demonstrates an improper way for the jury to make a factual determination that Jinro entered into a sham transaction. Accordingly, the district court abused its discretion by permitting the jury to consider Pelham’s testimony. We need go no further to reverse.
II
The wisdom of not reaching out for further unnecessary issues is demonstrated by the majority’s incorrect conclusion that the district court abused its gatekeeping obligation by permitting Pelham to testify as an expert witness in the first place. A district court’s rulings on the admissibility of expert testimony are reviewed for an abuse of discretion, Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999), and Kumho Tire “heavily emphasizes that judges are entitled to broad discretion when discharging their gatekeeping function.” United States v. Hankey, 203 F.3d 1160, 1168 (9th Cir.2000). “[I]n considering the admissibility of testimony based on some ‘other specialized knowledge,’ Rule 702 generally is construed liberally.” Id., citing United States v. Ramsey, 165 F.3d 980, 984 (D.C.Cir.1999) (holding that admission of Drug Enforcement Administration agent’s testimony was not plainly erroneous where the agent, while not formally qualified as an expert, described his, qualifications, including his specialized knowledge, education, skill and experience, before giving testimony).
Why does the majority believe Pelham has insufficient qualifications to testify about Korean business practices? Apparently, because he has no formal education (higher degree) or training in business (no MBA?) or culture (degrees in sociology or anthropology?) and has not attended law *1012school. Is this necessary to testify as an expert under Rule 702? See Hankey, 203 F.3d at 1169 (“[t]he Daubert factors (peer review, publication, potential error, etc.) simply are not applicable to this kind of testimony, whose reliability depends heavily on the knowledge and experience of the expert, rather than the methodology or theory behind it.”). But, Pelham’s years of experience investigating Korean businesses and commercial transactions belies the majority’s attempt to dismiss him as grossly unqualified. One may wonder why a lack of specific academic credentials should render one “glaringly inadequate” to testify reliably about business matters simply because the context is foreign.
Here, Pelham’s qualifications were thoroughly described to the jury before he testified. Pelham served in the United States Air Force for twenty-two years and served five tours of duty in Korea. He attended the United States Foreign Service Institute for East Asian Studies and joined the Air Force Office of Special Investigations in Korea in 1977. He was promoted to the position of commander of all Office of Special Investigation forces in Korea, where, for eight years, he investigated Korean companies and individuals doing business with the Air Force. After retiring from the Air Force, he helped found Pinkerton Korea Limited, a consulting company specializing in commercial security. Pelham is the general manager of Pinkerton, which provides security and information services for North American, European and Asian companies doing business in Korea. His position requires him to familiarize himself intimately with Korean business practices, financial regulations, and Korean business transactions with foreign companies.
The majority dismisses all this, seizing instead upon defense counsel’s statement that it was also a “hobby” of Pelham’s to study Korean business culture. I see it differently. I do not believe that it was an abuse of discretion for the district court to determine that Pelham’s qualifications possessed him of reliable “special knowledge” of the Korean business landscape and the behavior of Korean businessmen, which would “assist the trier of fact to understand the evidence or to determine a fact in issue.” Fed.R.Evid. 702. The irrelevant testimony ultimately elicited from Pelham should not be used to determine retroactively that he should never have been allowed to testify.
Ill
Had the majority not erred by opting to dodge the relevancy issue, it would not have wandered unnecessarily into the bramble-bush of race and ethnicity under Rule 403 prejudice in search of an issue which does not exist in this case. When it chose to do so, it inappropriately characterized Pelham’s testimony as inflammatory ethnic stereotyping, impheating constitutional due process concerns.
I fail to see the appeal to ethnic prejudice here. Certainly, Pelham’s testimony was unfair to Jinro as it lumped it together with other alleged untrustworthy and evasive Korean businesses. But how does this amount to unconstitutional ethnic stereotyping? I view the question of the practices of Korean businessmen as an issue of fact. That is, suppose Pelham’s testimony is true, that businessmen are deceptive in Korea. Simply because Pelham is a Caucasian American and his testimony concerned Koreans does not automatically taint his testimony with ethnic bias. For example, what if I were to testify that in a certain Third World country most of the judges have taken bribes. Is that an ethnically charged statement or simply an empirical observation? Here, Jinro had every opportunity to cross-examine Pel-*1013ham and introduce evidence to contradict this testimony. Yet Jinro offered nothing. Thus, because there is no evidence in the record disputing Pelham’s factual testimony, the issue becomes whether it is relevant. As I have stated, it was not — -that was the reversible issue, not Pelham’s alleged ethnic bias.
Moreover, the majority erroneously relies upon Bird and the criminal cases, Cabrera and Cambra, to make portentous pronouncements about the due process concerns at stake if such testimony were allowed to infect a civil trial. These cases, however, are quite easily distinguishable. In Bird — the only other civil case to import due process principles from criminal cases involving racial or ethnic bias — “[t]he trial throughout had racial overtones that culminated [in] a closing argument by [plaintiff] that repeatedly appealed to racial and ethnic prejudice.” Bird v. Glacier Elec. Coop. Inc., 255 F.3d at 1140. Bird involved a commercial dispute between two Montana corporations, one of which (the plaintiff) was located on the Blackfeet Reservation and whose principals were Native American. The plaintiffs closing argument “included mention of General Custer, analogies to ‘killing’ and ‘massacre’ of Indians, contrasts between ‘white man’s magic’ and the ‘lowly’ Indians, references to the cavalry riding into town to kill an Indian business, and comment about the lands of the Indian people being taken by the ‘conquering people.’ ” Id. “These statements were an emotionally-charged appeal to Indian collective memory, encouraging the jury to consider historical racial oppression allegedly perpetrated by the white race against Indians.” Id. at 1151. Nothing of the sort occurred in this case. To repeat, Pelham’s testimony was unfair to Jinro, but it is fanciful to assert that it was designed to inflame the jury with ethnic prejudice.
As for Cabrera and Cambra, it is dubious to rely on criminal cases to support the proposition that Pelham’s testimony was unduly prejudicial. Because criminal defendants are afforded far greater constitutional protection than parties to a civil suit, these cases are not so readily applicable to the civil context. Notwithstanding, these cases are also easily distinguishable as they too involved “repeated references” to ethnic groups such that the “cumulative effect [was to] put[ ] the [ethnic group] on trial,” thereby “prejudic[ing] [the defendant] in the eyes of the jury.” United States v. Cabrera, 222 F.3d 590, 596 (9th Cir.2000). The cumulative effect of Pel-ham’s testimony was to ascribe to Jinro the alleged behavior of other Korean businesses, not to place Koreans in general on trial.
Thus, I concur in the result, but only because of the critical irrelevant Pelham testimony.