In the world of expert witness testimony, as with the law in general, the truth is often stranger than fiction.
Take the current case of Luxco, Inc. v. Jim Beam Brands Co. Luxco is suing the iconic hangover-producer for providing faulty information prior to an asset sale, causing Luxco to pay too much for rights to certain alcohol brands. Nothing odd there; valuation cases come and go all the time. What’s interesting about this scenario is that in order to prove its case, the plaintiff is relying not on an independent expert – an economist or CPA, perhaps – but its own President and Chief Operating Officer, David Bratcher.
It’s unclear whether Bratcher is actually qualified as an expert in damages valuation, let alone whether he is the best expert for the job (and we all know how important that is.) What is clear is Bratcher’s intimate involvement in the case. As a top-ranking executive, he helped negotiate the deal, and as such is also serving as one of Luxco’s primary fact witnesses for the case. As Forward Forensics asks, “Will the court allow him to use facts from his own deposition as the basis for his expert opinion? Which hat will he wear if he’s called to the stand during a bench trial next month?”
It’s almost beyond speculation why Luxco would choose to use such an obviously impartial party as a key witness, unless they lacked any confidence that an unbiased expert would support their point of view. The defendant, of course, moved to exclude Bratcher’s testimony. Their argument is as logical as it is expected: that to prove damages, the plaintiff must show “how [the asset] would have been valued by knowledgeable investors at the time of the sale were such investors aware of any breaches proved by [the purchaser].” This makes sense. Why should the court trust that Luxco would have done things differently based on the “expert analysis” of the guy who is trying to prove that they would have done things differently?
Here’s where things get even more bizarre. In a memorandum opinion and order, the judge denied the defense’s motion. Her opinion states that she considered the issue in the context of Federal Rule of Evidence 403, under which the court may exclude relevant evidence if its probative value is substantially outweighed by factors like unfair prejudice, confusing the issue, wasting time, etc., but came to the conclusion that these concerns “are not at issue in the context of a bench trial.” Instead, she deemed that excluding Bratcher’s testimony would “leave out important contextual information” in his role as a fact witness.
To my mind, the judge’s choice to allow Bratcher’s expert witness testimony in order to preserve his input as a fact witness proves exactly how convoluted the situation is. It assumes that she, as a judge, is impervious to any conflicts of interest and can automatically see through any prevarication (unlike a jury, presumably.) Perhaps there is more to the story; we don’t know the precise contents of Bratcher’s expert report as it was filed under seal. On its face, however, I call foul. Expert witnesses’ mandate is to provide objective testimony. It’s the court’s job to ensure that they do exactly that. In this case, I’m not sure either party is holding up its end of the bargain.