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January 25, 2012 Articles

New Standards for Expert-Witness Disclosures

The amended Rule 26 allows experts to create draft reports without fear of discovery and makes it easier for litigators to work around discoverable communications.

By Thomas P. Branigan and Tina Georgieva

Federal Rule of Evidence 702 governs the admission of expert testimony. Rule 702 allows testimony to be admitted if the scientific, technical, or other specialized knowledge within that testimony will help the trier of fact make sense of the evidence or understand the facts. In its ruling for Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993),the Supreme Court established that judges are the "gatekeepers" against "junk science."

Federal Rule of Civil Procedure 26, which outlines the requirements and limitations of expert-witness disclosures, was substantially amended on December 1, 2010. Prior to 2010, Rule 26 was last amended in 1993. The Advisory Committee notes supplementing the 1993 amendment clarified that, from that point on, experts were required to disclose any and all data used in formulating their opinions. This was to include drafts and information that an expert might have rejected or not considered at all, thus preventing parties from claiming privilege over materials prepared by experts in the process of formulating their testimony. Since the 1993 amendment, most federal courts have borrowed the reasoning from the committee notes in ordering experts to disclose all draft reports and any communications that an expert has had with counsel.

These requirements led lawyers to adopt the practice of having little to no written correspondence with their experts to avoid creating discoverable information. This impractical custom came with drawbacks. On the one hand, lawyers could not freely communicate and exchange ideas with their experts, which, in turn, hindered the quality of an expert's analysis. Moreover, to ensure that they had the most sophisticated expert testimony, lawyers would frequently hire multiple experts—a testifying and a nontestifying expert. The nontestifying expert would act as the agent between the lawyer and the testifying expert by "guiding" the opinion of the testifying expert to comply with the lawyer's strategy. This process of purposefully exploiting the loophole created by the 1993 amendment translated into increased costs for clients.

Main Changes to Rule 26
When the new Rule 26 came into effect on December 1, 2010, it made significant changes to the rules for both retained testifying experts and nonretained testifying experts. The nontestifying experts affected by these amendments, such as employees and physicians, are experts who do not regularly provide expert testimony but are qualified as experts because of their expertise in a given field. In summary, the revised Rule 26 reduced production requirements related to experts, their underlying data, and their drafts; it created a class of "no report" experts; and it protected draft reports from discovery.

In summary, the revised Rule 26 added:

  • Narrower requirements for disclosure under 26(a)(2)(B). The rule narrowed down the broad requirement that "data or other information" be provided by requiring that only "data and facts" be disclosed.

  • Protections for draft reports under 26(b)(4)(B). Drafts of expert reports and disclosures are no longer discoverable.

  • Protections for certain communications between lawyers and experts under 26(b)(4)(C). Lawyer-expert communications are no longer discoverable except to the extent they meet three narrow exceptions.

  • An express requirement for no-report experts under 26(a)(2)(C). Experts who do not regularly provide expert testimony must file a disclosure regarding any such expert's opinions and the bases for them.

The Admissibility of Draft Reports and Allowing Privileged Communications
Notes from the Report of the Judicial Conference
As the Advisory Committee notes point out, the amendments to Rule 26 were intended to reduce the costs of expert-related discovery and improve the quality of expert testimony. These points address the problems that lawyers have attempted to overcome as a result of the 1993 amendments to the rule. The amended Rule 26 reflects the real role that experts play in everyday practice, which is that they have never been and never will be retained to be truly "neutral." Before the 2010 amendments, far too much discovery time was wasted in search of the obvious—that good trial lawyers always have and always will play an active role in shaping an expert's opinion and the way that opinion is presented to a fact finder. All these points were addressed in the Advisory Committee's notes.

In August 2008, the Advisory Committee on Civil Rules submitted proposed amendments to Rule 26 (along with amendments to Rules 8(c) and 56). Excerpt from the Report of the Judicial Conference, Committee on Rules of Practice and Procedure, To the Chief Justice of the United States and Members of the Judicial Conference of the United States: Federal Rules of Civil Procedure, Rules Recommended for Approval and Transition 1 [PDF]. The purpose of these amendments was to divert lawyers from the artificial discovery-avoidance practice that was the product of the 1993 amendments to Rule 26. As the notes pointed out, the amendments sought to break the habit of lawyers taking "elaborate steps to avoid creating any discoverable record and at the same time [taking] elaborate steps to attempt to discover the other side's drafts and communications." Id. at 2.

The 1993 amendments were interpreted to allow discovery of "all communications between counsel and expert witnesses and all draft expert reports," which has created significant practical difficulties over the past 15 years. Id. Because of this interpretation for broad and limitless discovery, lawyers would avoid creating a record of their interactions with experts, as it might become discoverable. Id. at 3. The notes suggested that the proposed amendments were an attempt to cure some of these issues, including wasteful discovery-avoidance, such as "hiring two sets of experts—one for consultation, to do the work and develop the opinions, and one to provide the testimony." This practice has repeatedly impeded the efficient and proper use of experts, increased costs to clients, and devaluated experts' work. Id.

Now, as a result of the 2010 amendments to Rule 26, expert draft reports and communications between lawyers and experts remain protected. At the same time, the notes recognize that discovery into the basis of an expert's opinion remains critical in determining the strengths and weaknesses of an expert's opinion. Id. at 4. For that reason, the amended rule specifically provides for three exceptions where communications between a lawyer and an expert are discoverable: compensation of the expert, facts and data the lawyer gave to the expert and that the expert considered, and assumptions provided to the expert by the lawyer on which the expert relied in forming an opinion.

In summary, the new Rule 26 should minimize wasteful discovery efforts that focus on the lawyer's involvement in the expert's opinion, rather than the strengths and weaknesses in the substance of that expert's opinion. The amended rule should reduce the practice of retaining multiple experts for the same issue, thus reducing costs to clients. Moreover, as the notes point out, the privilege protection should encourage communication between lawyers and experts. This would, in turn, help experts refine the focus of their opinions to better address the issues in a given case.

Despite the many changes and restrictions to what information relating to experts is not discoverable, none of the new amendments limit a party's ability to explore what an expert considered, adopted, rejected, or failed to consider in forming the opinions to be expressed at trial, nor affect the court's gatekeeping responsibilities under Daubert. Id. at 5.

Practical Implications and Recent Decisions Discussing the New Rules
The Rule 26 amendments relating to draft reports and privileged communications present the most significant changes for practitioners. The majority of lawyer-client communications do not fall under any of the three exceptions provided by Rule 26(b)(4)(C) and will, therefore, remain undiscoverable.

For example, although communications about facts that an expert considers in forming his opinion are discoverable, communications discussing the relevance of such facts are protected. Christopher Renzulli, Edwin Brondo, The New Rule 26: What You Need to Know [PDF]. Similarly, communications that relate to assumptions, like hypotheticals, are not discoverable if the expert does not rely on them in forming his or her opinion. Id. Therefore, many communications that might reveal bias or might otherwise demonstrate a flaw in the expert's approach remain undiscoverable to the opposition.

On the other hand, this becomes an advantage for the experts and the lawyers who retain them. Lawyers are now able to freely discuss various strategies and theories with their experts without a fear that those will be discovered by the opposing party. Id. This allows a lawyer to edit his or her own expert's draft reports and to freely address the weaknesses in that expert's opinions. In addition, all these communications may now be done in writing or transmitted through email with little risk that those writings will be discovered by opposing counsel. These practices should ultimately result in cost savings for clients.

While the new rules have been in effect for slightly less than one year, recent federal courts' opinions indicate that judges are looking to the Advisory Committee notes for guidance when faced with the question of discoverability of an expert's draft reports and privileged communications between that expert and the retaining lawyer.

For example, in Chevron Corp. v. Sheffitz, ___ F. Supp. 2d ___, 2010 WL 4985663, *5 (D. Mass. Dec. 7, 2010), a Massachusetts district court concluded, in dicta, that "the phrase 'facts or data' [in Rule 26(a)(2)(B)(ii)] should still be 'interpreted broadly to require disclosure of any material considered by the expert, from whatever source, that contains factual ingredients'" (the court borrowed the language of the Advisory Committee notes). See also Alec Cierny, Carter W. Ott, Recent Rule 26 amendments affect expert disclosures and draft reports (February 9, 2011).

In Graco, Inc. v. PMC Global, Inc., Slip Copy, 2011 WL 666056 *13 ( D.N.J. Feb. 14, 2011), a New Jersey district court acknowledged the "significant divergence between the 1993 version (and related case law) and the 2010 version of Rule 26." In Graco, the defendant sought to compel all documents, communications, and draft reports from the plaintiff's employee opinion witnesses and specially retained by plaintiff experts, none of which had yet been named as testifying witnesses. The court determined that both the plaintiff's employee opinion witnesses and his experts should be considered "testifying witnesses." However, the court limited the scope of the disclosure pursuant to the amended Rule 26, so the defendant was not entitled to a written report from the plaintiff's employee opinion witnesses but was "entitled to a disclosure stating the subject matter and a summary of facts and opinions proffered" by those witnesses, as well as written reports by the plaintiff's experts. In addition, drafts created by the plaintiff's employee opinion witnesses and expert witnesses were not discoverable, and the defendant was entitled to "all relevant discovery regarding the facts/data considered, reviewed or relied upon for the development, foundation, or basis of the expert witnesses' opinions, but not to any communications between them and Plaintiff's counsel."

More recently, in Sara Lee Corp. v. Kraft Foods, Inc., ___ F.R.D. ___, 2011 WL 1311900 (N.D.Ill. April 1, 2011), an Illinois district addressed the significant differences between the pre- and post-amendment Rule 26. The expert at issue had "advised Defendants on how they might conduct a pilot survey" relating to an advertisement. Id. at *4–5. The court concluded that none of these communications contain "facts, data, or assumptions" that the expert could have considered in assembling his report and are not discoverable. The court explained that these communications might have been, arguably, discoverable under the old Rule 26, "but no more," as they now receive work-product protection under Rule 26(b)(4)(C).

Some courts have also demonstrated a will to overrule pre-amendment leading case law discussing the application of Rule 26 when the reasoning of those cases conflicts with the discussion within the 2010 Advisory Committee notes. In Coleman v. American Family Mutual Insurance Co., 274 F.R.D. 641 (N.D. Indiana, June 2, 2011), the court decided that in light of the amendments to Rule 26, the then governing case of Meyers v. National R.R. Passenger Corp., 619 F.3d 729 (7th Cir.2010), was no longer in effect. The court in Meyers had held that a treating physician who intended to testify to the cause of the plaintiff's injuries would be required to submit an expert report. Meyers,619 F.3d. 734. In Coleman, the court determined that the deciding factor in whether experts "whose testimony often blurs the line between fact and opinion," such as physicians, are required to submit reports is the purpose for which that expert was first sought. Coleman, 274 F.R.D. 645. The court specifically emphasized the difference between an expert who was retained to testify and one who would testify for reasons independent of trial preparation. See also, Crabbs v. Wal-Mart Stores, Inc., Slip Copy, 2011 WL 499141 (S.D. Iowa, Feb 4, 2011) (holding that the approach taken by cases that require a report from a nonretained treating physician appears to have been overtaken by the 2010 amendments to Rule 26).

In Allstate Insurance Co. v. Nassiri, Slip copy, 2011 WL 2975461 (D.Nev. July 21, 2011), at issue was whether an employee whose duties did not regularly involve giving expert testimony was required to submit a written report. At that time, the majority view, based on the governing case law, was that the employee would have to provide a written report. The court's ruling that the employee was not required to prepare a written report was influenced by the amended Rule 26. The court reasoned that although the "amendment did not explicitly reject the [majority] interpretation, the fact that the Committee and the Supreme Court chose not to amend Rule 26 to adopt that position, but, instead, expanded the disclosures required for expert witnesses who are not required to prepare reports, supports the interpretation set forth [by the minority]."

Another area of interpretation that the courts will have to address is the amount of detail that an expert summary report must contain. Courts will need to determine the boundaries of discoverable communications within the exceptions under 26(b)(4)(C), "and the distinction between communications considered and assumptions relied on by the expert that fall within the enumerated list of exceptions to Rule 26(b)(4)(C)." Supra Cierny and Ott. These determinations will tend to be highly fact-driven, and courts will have to decide what is sufficient on a case-by-case basis. For example, in Meredith v. International Marine Underwriters, Slip Copy, 2011 WL 1466436 (D.Md., April 18, 2011), the plaintiff was ordered to provide a more detailed disclosure as a result of the 2010 amendments, and the court explicitly stated that "facts" must include "those facts upon which the witness' opinions are based, and 'opinions' [must] include a precise description of the opinion, rather than vague generalizations." Elaborating further, the court said that the "Plaintiff's description of the [experts'] opinion that the accident was the result of 'third causes' would not be sufficient, absent a detailed statement of exactly what those causes are or might be."

In the end, these changes to Rule 26 reflect the realities of litigation involving experts: Retained experts are rarely neutral witnesses. The changes to Rule 26 should cause expert-related discovery to be more focused on the strengths and weaknesses of the substance of an opinion and much less on the process of report drafting and communications between lawyer and expert.

The Likelihood of Success of Daubert Motions
Are You Likely to Win a Daubert Challenge?
While recent case law is helpful in understanding how courts are likely to interpret and apply the changes to Rule 26 related to experts, the effect of these changes on Daubert motion practice has yet to be seen. However, this much is clear: Filing Daubert motions for every opposing expert as a habit is not smart trial practice. Technical experts quite often are repeat operators. It is common for the same set of experts to appear over and over in certain product-liability cases, such as automotive product liability litigation. These technical experts are usually experienced "professional" witnesses, and because the standard for admitting their testimony is still relatively low, Daubert challenges rarely succeed.

Recently published data on the success of Daubert challenges supports this view. In 2010, Pricewaterhouse Coopers issued a report, Daubert Challenges to Financial Experts: An 11-Year Study of Trends and Outcomes [PDF], of its survey on challenges to financial expert witnesses under the Daubert standards. The study analyzed federal- and state-court-written rulings and included a review of 6,141 Daubert challenges to witnesses from all fields. The study showed that since Kumho Tire in 1999, the number of challenges has been steadily growing, resulting in three times the number of challenges from 2000 to 2010. Id. at 5, Figure 1. Of all the expert challenges during this period, only 45 percent of challenges succeeded in either complete or partial exclusion. And this relatively low success rate has remained relatively consistent over the past 10 years. Id. at 6, Figure 2; see Figure 1–4. In addition, a closer look at the data for 2010 reveals that complete exclusion of expert testimony occurred only 25 percent of the time, and partial exclusion was granted only 24 percent of the time. Id. at 6, Figure 3. Moreover, if a Daubert decision is appealed, statistics from circuit court decisions indicate that the district courts' rulings on Daubert motions are affirmed 87 percent of the time. Peter Nordberg, Daubert in the Circuits. In other words, there is essentially no help on appeal if a Daubert challenge is denied at the trial-court level.

The obvious consequence of losing a Daubert challenge is that the opposing expert remains in the case with his opinions intact. But what are the less obvious consequences? Given the statistical odds of losing, too often the challenge does nothing more than educate opposing counsel and his or her expert of your strongest cross-examination points. This free preview of your cross-examination outline provides opposing counsel and his or her expert with the best means to improve their scientific method and opinions well before trial. Therefore, a very detailed Daubert motion that does not succeed is not harmless. That motion exposes one's trial strategy to opposing counsel all at the expense of the client. This point becomes even more significant with the new Rule 26 in place, which protects drafts and most communications between lawyers and experts. Given the low success rate of Daubert motions and the consequences that flow from losing, counsel should be very cautious about over "Daubert-ing"

What Information Is Available on Opposing Experts?
Picking your battles and doing your homework may help you beat the odds. It goes without saying that one way to avoid losing a Daubert challenge is to not raise one. Objectively assessing the chances of success on the motion before a certain assigned district judge will increase your chances of success. In addition, having information on the expert that you plan to challenge is vital. You will lose if you challenge experts who have survived multiple challenges over the same issues.

There are numerous resources that contain information about Daubert challenges to experts and judges' dispositions to grant such Daubert challenges. One source is the Westlaw Expert Center, where one can search experts by name and view a one-page profile that includes the expert's CVs, Daubert challenges, exclusions, verdicts, and expert reports. Similarly, one may find this information using the Lexis Nexis Daubert Tracker—Case Reports. In addition, with the Daubert Tracker, one may search Daubert challenges before a particular judge or how frequently a lawyer hires a particular expert.

The 2010 amendments to Rule 26 are aimed at correcting the numerous artificial and wasteful practices related to experts that were developed to minimize the effects of the generous discovery system of the 1993 amendments.

The amended Rule 26 now allows experts to create draft reports without fear that they will be discovered by the opposing party. It also grants lawyers the freedom to interact with their experts so they no longer have to hire multiple experts just to avoid creating discoverable communications.

Although these are positive changes that reflect the reality of practice, a great deal of interpretation remains open to the courts. Questions about how communications between lawyer and expert will be classified, or what constitutes sufficient detail in an expert report, were not addressed by the Advisory Committee notes and will be left for courts to decide.

Keywords: litigation, expert witnesses, Federal Rule of Civil Procedure 26, Advisory Committee notes, Daubert, privileged communications

Thomas P. Branigan and Tina Georgieva are with Bowman and Brooke, LLP.

Copyright © 2012, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).