Opinion handed down July 29, 2015
At the trial level, the testimony of Plaintiffs’ expert witness was excluded and summary judgment was entered in favor of Defendants on claims dependent upon the excluded testimony; the remaining claims were stayed.[1] On appeal, the U.S. Court of Appeals for the Eighth Circuit held the exclusion of Plaintiffs’ expert was error.[2] The errors were reversed and the district court’s order granting summary judgment was vacated.
I. Facts and Holding
Timmy A. and Deborah Taylor sued Cottrell, Inc. after Mr. Taylor was injured in a trucking accident.[3] The district court excluded one of the Taylors’ expert witnesses because the doctor had entered into an impermissible contingent fee arrangement, which, allegedly undermined any testimony he might have offered.[4] With the expert excluded, the trial court found that the Taylors lacked sufficient evidence without an expert opinion on causation of damages and granted summary judgment in favor of Cottrell.[5] The Eighth Circuit held the district court erred in excluding the Taylors’ expert witness.
II. Legal Background
The district court’s exclusion of the expert witness was reviewed under an abuse of discretion standard,[6] and its findings of fact were reviewed under a clear error standard.[7]
The issue of whether a contingent payment for an expert witness’s services serves to disqualify the witness was an issue of first impression for the Eighth Circuit.[8] Courts in other jurisdictions have disagreed on whether a contingent fee arrangement for an expert’s services automatically disqualifies, may serve to disqualify, or can never alone disqualify an expert witness.[9]
III. Instant Decision
The Eighth Circuit noted it was unclear from the district court’s order whether it believed the contingent fee arrangement existed for the doctor’s expert witness services or from past medical expenses.[10] However, the language employed by the district court suggested the contingency was for the expert witness services, as opposed to prior medical expenses.[11] Furthermore, the Restatement cited by the district court suggested that the court believed the doctor’s compensation was contingent upon the outcome of the case.[12] However, the district court was unable to cite any evidence in the record to support such a finding.[13] During the Eighth Circuit’s independent review, it found the undisputed evidence record established the doctor was actually paid an hourly rate during his deposition.[14] Therefore, the Eighth Circuit held the district court clearly erred to the extent the district court barred the doctor’s expert testimony because it was contingent upon the outcome of the case.[15]
The Eighth Circuit also held that even if the district court excluded the doctor’s testimony on the ground that payment of Plaintiff’s medical bills was contingent upon the outcome of the case, it was also error.[16] The only evidence the parties were able to present supporting the argument that the doctor had an interest in the case were three “letters of protection” and the testimony of the doctor’s business manager.[17] However, the Eighth Circuit held “neither supported a finding that Taylor would not be responsible for paying his past medical expenses should he fail to recover any proceeds in litigation.”[18] Because the letters essentially provided a personal guarantee for the payment of medical expenses, they failed to establish that the payment of medical services was contingent upon the outcome of the case.[19]
Weber, the business manager for the doctor’s practice, submitted a supplemental affidavit to the district court following her deposition, “highlighting the difference between the practical inability to get paid should Taylor fail to recover anything and the affirmative act of forfeiting the right to seek payment.”[20] She explained that “as a practical matter, should Taylor fail to recover anything, Dr. Odor's office would be unable to collect on the amount owed—not that Dr. Odor's office had given up the right to collect.”[21] The Eighth Circuit noted post-deposition affidavits are not allowed to contradict prior testimony in an attempt to create issues of fact.[22] The court found the business manager’s affidavit did not contradict her prior deposition testimony, but rather clarified and explained.[23] Because the supplemental affidavit of the doctor’s business manager clarified ambiguities or confusion in her deposition testimony, the district court erred in excluding it.[24] The Eighth Circuit ultimately held, “there is simply no evidence in the record that Taylor’s payment for the past medical services was contingent on the outcome of this litigation. To the extent the district court held there existed such an interest, it also clearly erred.”[25]
IV. Comment
Of the two options for paying an expert witness a contingent fee, or a fee that is necessarily contingent upon the outcome of a particular case, the lesser of two evils is making the payment for the doctor’s past medical bills. The policy behind this would most likely be that it constitutes bad policy to make medical bills contingent because it has the potential to influence doctors to be more apprehensive and frugal in treating a patient. There are other checks on this, such as insurance or the potential of medical malpractice. This also seems preferable because the policy repercussion of having a doctor’s trial testimony contingent upon the outcome of a case could influence dishonesty and potential fraud on the court.
However, a question arises: Is having a doctor’s expert witness trial testimony contingent upon the case really that awful of an evil? We allow lawyers to have their fees contingent upon the outcome of a case where there would seem to be the same opportunity for dishonesty and fraud. If we could apply the Model Rules of Professional Conduct to the testimony of doctors, economists, and psychologists, then one could argue that making their testimony contingent upon the case isn’t that awful of an evil. As lawyers, we only have one set of facts and the same law to work with, yet there is the possibility for each side to eloquently articulate perfectly reasonable arguments that support two completely different outcomes. We allow the jury to weigh in and decide which side’s argument will prevail. With doctors, economists, and psychologists, they too would only be able to work with the same set of facts but use different theories and analysis to arrive at opposite sides of a spectrum when they reach their conclusion. Should we let advocacy prevail and give as much credence to a jury’s judgment regarding the credibility of an expert witness as we do with their ability to judge the credibility of an attorney?
– Nick Griebel
[8] Id.
[9] Id. at 816-17 (comparing “Straughter v. Raymond, No. 08-2170 CAS (CWx), 2011 WL 1789987, at *3 (C.D. Cal. May 9, 2011) ("The Court finds that the better course of action is to exclude the testimony of expert witnesses in civil cases whose compensation is contingent on the outcome of the case."); Farmer v. Ramsay, 159 F. Supp. 2d 873, 883 (D. Md. 2001) (striking expert's reports because "witness contingency fee agreements affirmatively violate the fundamental policy of Maryland and the United States" (internal quotation marks omitted)), aff'd on other grounds, 43 F. Appx 547, 551 n.5 (4th Cir. 2002) (not deciding whether it was proper to exclude the expert report because it was unnecessary); Accrued Fin. Servs., Inc. v. Prime Retail, Inc., No. CIV.JFM-99-2573, 2000 WL 976800, at *3 (D. Md. June 19, 2000) ("Financial arrangements that provide incentives for the falsification or exaggeration of testimony threaten the very integrity of the judicial process which depends upon the truthfulness of the witnesses."); J & J Snack Foods, Corp. v. Earthgrains Co., 220 F. Supp. 2d 358, 367 n.8 (D.N.J. 2002) ("A contingent fee arrangement with an expert witness would be unethical, and would undermine or destroy the reliability of the survey design and execution."); Tagatz v. Marquette Univ., 861 F.2d 1040, 1042 (7th Cir. 1988) ("It is unethical for a lawyer to employ an expert witness on a contingent-fee basis but it does not follow that evidence obtained in violation of the rule is inadmissible. The trier of fact should be able to discount for so obvious a conflict of interest. In any event, there was no objection to Dr. Tagatz's testifying as an expert witness, so we need not delve deeper into this intriguing subject." (internal citations omitted)); Universal Athletic Sales Co. v. Am. Gym, Recreational & Athletic Equip. Corp., 546 F.2d 530, 539 (3d Cir. 1976) ("[I]t does not necessarily follow that any alleged professional misconduct on his part would in itself render his testimony . . . a nullity."); Milfam II LP v. Am. Commercial Lines, LLC, No. 4:05-cv-0030- DFH-WGH, 2006 WL 3247149, at *2 (S.D. Ind. Mar. 30, 2006) ("The Seventh Circuit has not held such arrangements illegal per se but has instead left the trier of fact to consider the credibility issues."); Valentino v. Proviso Twp., No. 01 C 557, 2003 WL 21510329, at *3 (N.D. Ill. June 26, 2003) ("Thus, the issue of Horstman's compensation and his beliefs about his compensation only affect Horstman's credibility as a witness, not the admissibility of his report and testimony.")).
[20] Id. at 818-819.
