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May 01, 2017 Articles

How Designation of Expert Witnesses Can Make or Break Privilege

Tips to avoid having to disclose critical trial strategy to your opponent.

By Daniel Barsky

Expert witnesses play an essential role in most complex commercial litigation, providing critical testimony to link the testimony of “lay” fact witnesses with causation or liability. For that reason, expert witnesses are a critical part of your trial team necessary to make your case. However, if you use or designate experts improperly, you may accidentally waive privilege and be compelled to disclose critical trial strategy to your opponent.

In cases with complex, lengthy, or detailed factual scenarios, the trier of fact—whether judge or jury—will be bombarded with hours of testimony from numerous fact witnesses testifying about what they witnessed. A lay witness may testify that, while operating a product, she smelled smoke and that the product later erupted in flames. However, because Federal Rule of Evidence 701 generally limits fact witness testimony to what the witness saw, heard, or otherwise directly perceived, that same witness cannot testify why (or why she thinks) the product ignited. A voice—or voices—are needed to link the testimony of the various fact witnesses with the admitted exhibits and thus create a cohesive story of not just what happened but why it happened (causation) and what to do about it (damages).

Expert witnesses, through their testimony, provide that link to establish causation and damages and are therefore necessary in most complex commercial cases. A good expert can provide compelling testimony that assists you in advancing your theory of the case, telling a story that captivates the trier of fact and convinces the judge or jury of the merits of your case.

At the same time, using an expert introduces the risk of losing certain privileges and protections, and the rules governing experts underwent significant amendments in 2010. Under the current scheme, identifying whether your expert is (1) reporting or non-reporting and (2) consulting or testifying—then following the rules for the type of expert you are using—is critical to protecting your key trial theory and strategy.

Reporting or Non-Reporting?
Prior to 2010, the cautionary rule of thumb was that whatever you share with the expert is discoverable. This guidepost typically was applied to drafts of, and revisions to, expert reports. Following the 2010 amendments to the Federal Rules, the pendulum seemed to shift to the other extreme—that is, whatever you share with the expert is protected from discovery. Unfortunately, the current rules are not nearly so cut-and-dried. The extent of the privilege depends on whether your expert is “reporting” or “non-reporting.”

The Federal Rules of Civil Procedure allow for experts to be reporting (Rule 26(a)(2)(B)) or non-reporting (Rule 26(a)(2)(C)). A witness is a “reporting” expert if “retained or specially employed to provide expert testimony in the case or . . . whose duties as the party’s employee regularly involve giving expert testimony.” Fed. R. Civ. P. 26(a)(2)(B).

Examples of reporting experts are causation experts, outside accountants retained to calculate damages or business valuations, and engineers retained for testimony regarding patented technology. Non-reporting experts include a party’s own accountants, treating physicians, and business owners.

The 2010 amendments made explicit that “Rules 26(b)(3)(A) and (B) [which protect trial preparation materials from discovery] protect drafts of any report or disclosure required under Rule 26(a)(2), regardless of the form in which the draft is recorded.” Fed. R. Civ. P. 26(b)(4)(B). The new rule also “protect[s] communications between the party’s attorney and any witness required to provide a report under Rule 26(a)(2)(B), regardless of the form of the communications” with limited exceptions. Fed. R. Civ. P. 26(b)(4)(C). The advisory committee notes to the 2010 amendments make clear that draft reports and communications between counsel and the reporting expert are protected from discovery. (There are exceptions to this rule, as when an attorney becomes so involved in the drafting of the report that the attorney effectively becomes the expert, but those exceptions are an article unto themselves.)

However, the rule protects communications only between the party’s attorney and “any witness required to provide a report.” Fed. R. Civ. P. 26(b)(4)(C) (emphasis added). Note that the rule does not expressly protect communications involving non-reporting experts. Moreover, use of the language “required to provide” suggests that one cannot gain protection over a non-reporting expert by voluntarily providing a report. Therefore, you should determine whether your expert is a reporting or non-reporting expert prior to engaging in substantive communication with your expert. If your expert is non-reporting, then the adage that communications with experts are discoverable still applies. See Luminara Worldwide, LLC v. RAZ Imports, Inc., 2016 U.S. Dist. LEXIS 158183 (D. Minn. Nov. 15, 2016).

Another implication of the rule is the potential limited waiver of protection with corporate employees if those employees are going to be called as non-reporting expert witnesses. In Luminara Worldwide, the court held that documents “considered” by a non-reporting employee/inventor were discoverable and that “considered” would be broadly interpreted as “encompass[ing] material not only used, but generated, seen, reviewed, and/or reflected upon. . . .” Therefore, practitioners must be careful when deciding to use corporate employees as non-testifying experts as their witness preparation materials will become discoverable.

Consulting or Testifying?
Rule 26(b)(4) also differentiates between consulting and testifying experts. Consulting experts are experts who are retained in anticipation of litigation and who are not expected to testify at trial—for example, consumer survey experts retained to conduct research before bringing a trademark infringement action. As in the case of reporting experts, “[o]rdinarily, a party may not, by interrogatories or deposition, discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or to prepare for trial and who is not expected to be called as a witness at trial.” Fed. R. Civ. P. 26(b)(4)(D).

However, practitioners need to be careful not to inadvertently expose their consulting expert to potential discovery. In Apple Inc. v., Inc., 2013 WL 1320760 (N.D. Cal. Apr. 1, 2013), the court addressed whether initial pre-suit survey work conducted by two assistants to Apple’s testifying expert was discoverable. The court held that the two assistants must be made available for limited deposition to probe their activities and involvement in the testifying expert’s report, including their activities relating to the four pre-suit surveys.

It is therefore important for practitioners to ensure that their consulting experts do not become entangled with their testifying experts to avoid waiver of privilege covering critical trial preparation and strategy materials.

Expert witnesses are essential team members in most complex commercial litigation. A good expert witness can seamlessly weave the testimony and exhibits introduced through numerous lay witnesses into a coherent story that convinces the trier of fact of the merits of your case.

The rules governing disclosure and production of discovery from experts are tricky and fraught with pitfalls. “Reporting” experts are subject to certain protections, while documents “considered” by non-reporting experts—a term that will likely be broadly construed—are subject to production. It is thus critically important for practitioners to properly identify and classify their experts early in litigation lest they inadvertently make otherwise protectable work product fair game for discovery.

Daniel Barsky – May 1, 2017