Excluding Lay Opinion Testimony That “Crosses The Line” Into Expert Opinion

In a Title VII sex discrimination employment suit, the plaintiff’s opinion testimony on her estimated lost earnings and pension benefits should not have been admitted as lay opinion testimony under FRE 701, nor as expert testimony under FRE 702, in Donlin v. Philips Lighting North America Corp., 581 F.3d 73 (3d Cir. Sept. 9, 2009) (Nos. 07-4060, 07-4081)

FRE 701 and 702 were amended in 2000 as part of an effort to “eliminate the risk that the reliability requirements set forth in Rule 702 will be evaded through the simple expedient of proffering an expert in lay witness clothing.” ACN 701 (2000 Amendments). What about the reverse scenario, allowing a lay witness to set forth his or her opinion on a matter that essentially requires application of reliable expert theory and technique? The Third Circuit recently reversed and remanded an employment discrimination damages judgment that was based on improperly admitting lay testimony on matters that required the sophistication and reliability of an expert.

In the case, plaintiff Donlin was a temporary employee of Philips. When the company did not hire her as a full time employee, she filed a Title VII sex discrimination and retaliation suit. The jury’s verdict found Philips liable for sex discrimination. The jury in an advisory role as to equitable damages recommended the judge impose $63,050 in back pay and $395,795 in front pay, which the trial judge ultimately reduced to a total of $164,850. The parties cross-appealed, with the defendant contending that the trial judge admitted improper damages testimony under FRE 701 by:

“allowing Donlin to provide specialized or technical testimony regarding her compensatory damages. As to back pay, the District Court allowed Donlin to testify not only about her actual earnings, but also about her estimated lost earnings and pension benefits. With regard to front pay, Donlin’s testimony detailed the number of years she intended to work and the annual salary differential between Philips and the other companies where she was employed. In addition, Donlin estimated her future pension value, performed a probability of death calculation, and reduced her front pay award to its present value.”
Donlin, 581 F.3d at 80.


The Third Circuit reversed the damages award because of the admission of the plaintiff’s testimony on damages -- that is plaintiff’s testimony on back pay, the estimated accrued salary was not paid to plaintiff had the discrimination not happened, and front pay, basically future lost wages had the discrimination not occurred. The circuit explained that the plaintiff’s testimony on what she would have been paid had the discrimination not occurred was not proper lay testimony. It entailed sophisticated calculations and projections and yet this testimony had not been assessed for the reliability as required under Daubert and FRE 702 for admission of expert opinion. Lay testimony must “result[ ] from a process of reasoning familiar in everyday life,” and this necessarily does not include the sophisticated projections “which can be mastered only by specialists in the field.” Donlin, 581 F.3d at 81 (citing ACN FRE 701) (2000 Amendments).

The circuit explained that applying these principles “does not mean that an expert is always necessary whenever the testimony is of a specialized or technical nature.” As an example, it noted that “[w]hen a lay witness has particularized knowledge by virtue of her experience, she may testify -- even if the subject matter is specialized or technical-because the testimony is based upon the layperson’s personal knowledge rather than on specialized knowledge within the scope of Rule 702.” Donlin, 581 F.3d at 81.

However, there was some confusion on this issue. For instance, the circuit admitted that it “consistently” allowed “lay testimony requiring future projections of a business or operation come from someone who has intimate and thorough knowledge of the business gathered from either a lengthy tenure or a position of authority.” Donlin, 581 F.3d at 81 (citing Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1175 (3d Cir. 1993) (company’s founder and owner could testify on his lost future profits and harm to the value of his business because although the testimony concerned a “specialized” field and involved predictions about future business performance, the witness had adequate personal knowledge in light of his in-depth experience with the business’s contracts, operating costs, and competition)).

If a business owner could make projections of lost revenue the owner would have obtained had it not been for the defendant, why can’t an employee make projections on the lost wages they would have obtained had they not been discriminated against by the defendant? The circuit did not address this question directly. Instead, it distinguished the two situations from Donlin’s case. In other cases allowing such lay testimony, the plaintiff had extensive and “significant” experience in dealing with the matter upon which they would make projections. Donlin, 581 F.3d at 81 (citing Maxfield v. Sinclair International, 766 F.2d 788, 797 (3d Cir. 1985) (In age discrimination case allowing plaintiff with 40 years experience in the business to testify as to his projected earnings and to reduce those earnings to present value where he based his calculations of front pay upon his former earnings without making any projection in earnings “for which expert testimony was required.”); Eichorn v. AT & T Corp., 484 F.3d 644, 648-49 (3d Cir. 2007) (excluding plaintiff’s damages evidence where plaintiff employees sued claiming a violation of their pension rights but presented no expert witness on damages and instead relied on a report and testimony from plaintiffs’ counsel’s son, because FRE 701 as amended in 2000, requires a lay witness to have a “reasonable basis grounded either in experience or specialized knowledge for arriving at the opinion that he or she expresses,” so that a witness testifying based on neither experience nor personal knowledge and where the witness’s calculations were “sufficiently complex” was properly barred)).

Based on these considerations, the circuit concluded:

“Donlin’s testimony crossed the line into subject areas that demand expert testimony. Specifically, we find that Donlin’s testimony regarding the pension component of her back pay damages was improper. On the issue of front pay, Donlin’s lay testimony was inappropriate with regard to her estimate of the annual pay raises at Philips, her estimated pension value, and the discounts she made for the probability of death and to find the present value of the award. Because this testimony was of a specialized or technical nature and was not within Donlin’s personal knowledge, the District Court abused its discretion in allowing her to offer it.”
Donlin, 581 F.3d at 83 (footnote omitted).


Donlin makes clear the applicability of the general rule that a witness testimony is more in the nature of expert opinion testimony when it addresses matters “beyond the realm of common experience and which require the special skill and knowledge.” On the other hand, testimony reflecting personal knowledge and accordingly susceptible to specific cross-examination, is more in the nature of lay opinion testimony. In distinguishing between these two, however, the Third Circuit emphasized that even though different types of opinion testimony, “A trial judge must rigorously examine the reliability of a layperson’s opinion by ensuring that the witness possesses sufficient specialized knowledge or experience which is germane to the opinion offered.” Donlin, 581 F.3d at 83 (citing Asplundh Mfg. Div. v. Benton Harbor Eng’g, 57 F.3d 1190, 1200-01 (3d Cir. 1995)).

Federal Rules of Evidence
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