May 23, 2018 Articles

Experts May Rely on Hearsay . . . Except When They May Not

An expert may base an opinion on inadmissible evidence, such as hearsay, but there are limitations.

By Davis B. "Pepper" Allgood

Federal Rule of Evidence 703 lets an expert base an opinion on “facts or data in the case that the expert has been made aware of” and not just facts or data that the expert has “personally observed.” The facts or data “need not be admissible” for the expert’s opinion to be admitted if “experts in the particular field would reasonably rely on those kinds of facts or data in forming an opinion on the subject.” Fed. R. Evid. 703.

Under Rule 703, courts routinely let experts testify based on otherwise inadmissible evidence, including the hearsay opinions of other experts or the work product of others who may or may not be experts. Technical experts often rely, necessarily, on the opinions of other experts with different expertise. In a nonlitigation context, experts may rely on research, surveys, or experiments performed by their own support teams or by third-party contractors when rendering professional services. In a litigation context, Rule 703 lets these experts rely on the same sources of information to support their courtroom testimony.

Notwithstanding Rule 703’s broad language, and despite the wide leeway that courts typically give experts under that rule, a number of important limitations exist to control its misuse. As a district judge in the Northern District of California has observed, “[o]ne of the worst abuses in civil litigation is the attempted spoon-feeding of client-prepared and lawyer-orchestrated ‘facts’ to a hired expert who then ‘relies’ on the information to express an opinion.” Therasense, Inc. v Becton Dickinson Co., No. C 04-02123 WHA, 2008 U.S. Dist. LEXIS 124780, at *13 (N.D. Cal. May 22, 2008). To curb such perceived abuses, courts may invoke a number of safeguards to prevent litigants from putting Rule 703 to illegitimate purposes.

Federal Rule of Evidence 703 lets an expert base an opinion on “facts or data in the case that the expert has been made aware of” and not just facts or data that the expert has “personally observed.” The facts or data “need not be admissible” for the expert’s opinion to be admitted if “experts in the particular field would reasonably rely on those kinds of facts or data in forming an opinion on the subject.” Fed. R. Evid. 703.

Under Rule 703, courts routinely let experts testify based on otherwise inadmissible evidence, including the hearsay opinions of other experts or the work product of others who may or may not be experts. Technical experts often rely, necessarily, on the opinions of other experts with different expertise. In a nonlitigation context, experts may rely on research, surveys, or experiments performed by their own support teams or by third-party contractors when rendering professional services. In a litigation context, Rule 703 lets these experts rely on the same sources of information to support their courtroom testimony.

Notwithstanding Rule 703’s broad language, and despite the wide leeway that courts typically give experts under that rule, a number of important limitations exist to control its misuse. As a district judge in the Northern District of California has observed, “[o]ne of the worst abuses in civil litigation is the attempted spoon-feeding of client-prepared and lawyer-orchestrated ‘facts’ to a hired expert who then ‘relies’ on the information to express an opinion.” Therasense, Inc. v Becton Dickinson Co., No. C 04-02123 WHA, 2008 U.S. Dist. LEXIS 124780, at *13 (N.D. Cal. May 22, 2008). To curb such perceived abuses, courts may invoke a number of safeguards to prevent litigants from putting Rule 703 to illegitimate purposes.

Rule 703: Reliance
Rule 703 limits an expert’s ability to base an opinion on inadmissible facts and data, such as hearsay, unless the proponent of the opinion meets its burden to show that “experts in the particular field would reasonably rely” on those kinds of facts or data. See Fed. R. Evid. 702 advisory committee’s note; see also Fed. R. Evid. 104(a). This means that the proponent of expert testimony must show that other experts in the field would reasonably rely on the type of information on which the witness wants to rely.

For example, in Meridian Engineering Co. v. United States, 130 Fed. Cl. 147 (2016), the court prevented an accountant who had been hired to provide opinions on the reasonableness of certain claimed costs in a construction case from testifying that a contractor took too long to perform a task and therefore should recover less than the claimed amount for the allegedly inefficient work. The court allowed testimony from the accountant on other subjects that were within the accountant’s field of expertise. However, the court did not allow the accountant to rely on a third party’s technical evaluation of the reasonableness of the time that the contractor spent on the task because the party sponsoring the expert’s opinion “failed to demonstrate that government accounting experts reasonably rely on technical evaluations.” Id. at 170. Because no evidence showed that accountants typically rely on such third-party analyses to do what they do, the expert could not rely on the hearsay report at trial.

Rule 703 and Daubert: Reliability
Rule 703 requires that a testifying expert’s reliance on another expert’s opinion, or on facts or data supplied by someone else, be “reasonable.” In addition, under Rule 702 and Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993), the expert’s proffered testimony itself must be “reliable.” These two rules create similar requirements that courts have applied to scrutinize the underlying opinions on which a testifying expert wants to rely.

Courts have held that an expert’s proffered testimony is not reasonable under Rule 703 nor reliable under Rule 702 if that expert relies on an underlying opinion that does not itself meet Daubert’s reliability requirements. For example, in Gopalratnam v. Hewlett-Packard Co., 877 F.3d 771 (7th Cir. 2017), the Seventh Circuit affirmed a district court’s exclusion of expert testimony in a products liability case where the expert had relied on another expert whose opinions did not pass scrutiny under Daubert. In that case, a fire safety expert had been hired to provide opinions about whether an allegedly defective laptop battery caused a fire. However, the fire safety expert had no expertise in laptop batteries and had relied on a battery expert whose opinions the court excluded as based on “speculation” and “unfounded inferences.” Id. at 783–88. Because the battery expert’s opinions did not meet Daubert’sreliability requirements, the fire safety expert could not rely on those opinions when providing expert testimony about the alleged cause of the fire. Id. at 788–90.

Limitations on Experts Serving as Conduits
In many cases, experts may rely without controversy on opinions formed or facts perceived by third parties who will not themselves appear at trial to testify. Doctors, for example, routinely make diagnoses based on X-rays performed by radiologists or on vital signs recorded by registered nurses. Even if the radiologists or registered nurses do not appear at trial, the doctor may rely on information gathered by them when presenting expert opinions in court. See Fed. R. Evid. 703 advisory committee’s note. However, courts may properly refuse to allow a testifying expert to serve as the “mere conduit” for a nontestifying witness’s perceptions or opinions when the nontestifying witness should in fairness appear in court herself to present and defend her perceptions or opinions.

For example, in Dura Automotive Systems of Indiana, Inc. v. CTS Corp., 285 F.3d 609, 613–15 (7th Cir. 2002), the Seventh Circuit held that where a testifying expert relies on a nontestifying expert who “exercise[s] professional judgment that is beyond the [testifying] expert’s ken,” or the “soundness of the underlying expert judgment is in issue,” the testifying expert cannot simply act as the “spokesman” for the nontestifying expert’s opinion. In those situations, the underlying expert must independently appear to explain and justify his opinions to the trier of fact.

Courts acknowledge that drawing bright-line distinctions between proper and improper use of opinions from nontestifying experts can be difficult. As one court observed,

[t]his is more of a continuum, than a bright line, and the key is whether the disclosed expert, using inputs that are generally relied upon by other experts in the field, is offering opinions within his or her expertise, or merely serving as “the mouthpiece of a scientist in a different specialty.”

EEOC v. DHL Express (USA), Inc., No. 10 C 6139, 2016 U.S. Dist. LEXIS 135083, at *15 (N.D. Ill. Sept. 30, 2016).

Litigants may also encounter problems trying to use testifying experts as conduits for disputed “facts” about which the experts lack personal knowledge. If a litigant’s primary purpose is to persuade the factfinder that the underlying assertions of fact are true, the opinion testimony may not be a proper vehicle for that evidence. Also, an expert ordinarily should not be used to “explain” factual information that a factfinder can evaluate without the help of an expert.

For example, in Marvel Characters, Inc. v. Kirby, 726 F.3d 119, 135 (2d Cir. 2013), the defendants in a copyright dispute proffered expert “historians” to recount stories that they had heard from comic book artists who had worked with a comic book publisher over an extended period of years. The proffered experts had relied on those anecdotes to justify their opinions about the motivations of the publisher concerning the rights to certain artwork. Distinguishing situations in which historians are called upon to explain or summarize arcane historical information, the Second Circuit affirmed the exclusion of the experts’ proposed testimony under Rules 702 and 703. The Second Circuit explained that “[t]he appropriate way to adduce factual details of specific past events is, where possible, through persons who witnessed those events.” Id. at 136.

Deciding when an expert acts as a mere conduit for what should be fact testimony from an eyewitness also defies bright-line analysis. In Owens v. Republic of Sudan, 864 F.3d 751 (D.C. Cir. 2017), for example, a party successfully presented expert testimony that the Republic of Sudan was a state sponsor of terrorism based on otherwise inadmissible material, such as hearsay testimony from other judicial proceedings, government reports, and other secondary sources. Ordinarily, hearsay evidence about Sudan’s alleged terrorist activities would not be admissible to prove that Sudan had, in fact, participated in those activities. However, the court allowed the experts to present their opinions because a “layperson could not reliably have reached the same conclusions as the experts” through an unaided review of the underlying material. Id. at 791.

These two cases show that a critical determinative in whether an expert may rely on facts perceived by nontestifying witnesses is usually the requirement under Rule 702 that the expert’s “specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue.” Where the trier of fact does not need specialized expertise to evaluate fact evidence, the factfinder should hear the evidence directly from the eyewitness. Also, even where expert guidance would be helpful, Rule 703’s requirement that the expert’s testimony rest on evidence of the type reasonably relied on by others in the field provides another important level of protection.

Conclusion
Federal Rule of Evidence 703 gives testifying experts wide latitude to base their opinions upon and sometimes disclose to the jury the substance of what would otherwise be inadmissible hearsay. However, litigants must recognize that there are important limits on this rule.


Davis B. “Pepper” Allgood is a partner in the Baton Rouge, Louisiana, office of Jones Walker LLP.


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