Necessity Of Offer Of Proof On Expert Testimony

Fifth Circuit highlights the need to object to the exclusion of the expert testimony under FRE 702and also make "an offer of proof, unless the substance was apparent from the context” under FRE 103(a)(2); the trial court's error in excluding the expert testimony could not be assessed in the absence of a sufficient record, in United States v. Liu, _ F.3d _ (5th Cir. May 6, 2013) (No. 12-30105)

As previously noted in the Federal Evidence Blog, the courts have underscored the need to preserve and create a record at trial to preserve a challenge to expert testimony on appeal. See, e.g., Error In Not Making On-The-Record Daubert Reliability Findings After Objection To Expert Testimony ; Failing To Preserve Challenge To Lost Profits Expert Testimony On Appeal. A recent Fifth Circuit case considered trial court error in excluding defense expert testimony and the consequences of a limited record created for appellate review.

In the case, during 1965 through 1992, defendant Wen Chyu Liu (also known as David W. Liou) he worked on research and development in the Dow Chemical Company (“Dow”) on chlorinated polyethylene (“CPE”), “a white, powdery substance that tolerates extreme pressures and temperatures” and which “is used in hydraulic hoses, electrical cable jackets, and building and construction materials such as vinyl siding.” Liu, _ F.3d at _. He was prosecuted for conspiracy to steal trade secrets involving CPE and perjury. Trial evidence showed the Liu recruited others to steal CPE information from Dow and pursued the sale of the CPE process to Chinese customers. The perjury count was based on his deposition answers concerning his travel to China in a related civil suit.

Trial Court Exclusion Of Defense Expert

At trial, the defense sought to introduce the expert testimony of chemical engineer Ostermiller on the issue of what information was already in the public domain concerning the trade secret information and “general engineering knowledge regarding the manufacture of CPE available without access to proprietary Dow information.” However the government objected that it had learned during trial that the expert also would testify about his comparison of the DOW CPE process with the “CPE process sold to the Chinese companies.” Liu, _ F.3d at _. The government noted that it had not received pretrial notice of this expanded testimony as required. Initially, the trial court stated its “inclination … to allow [expert Ostermiller’s comparison testimony], but I’m going to withhold a ruling. Let me see how you qualify this witness, and what areas he’s qualified in, and see what questions you ask him.” Liu, _ F.3d at _. During voir dire of the expert, some limitations in the expert’s background were highlighted:

Ostermiller, however, had never worked in a CPE plant and, faced with that testimony, the district court explained it was “troubled by the fact that he’s never even been to a CPE plant, never worked in a CPE plant, never been accepted as an expert in CPE, and can’t talk about the significance of the operating conditions of a CPE plant, or the effect on the CPE process.” The court further noted that what “I have to keep in mind under Daubert is granting the status of expert cloaks in with some indicia of authority before the jury.” The court found that Ostermiller was not an expert with respect to CPE, and it excluded Ostermiller’s testimony entirely.

Liu, _ F.3d at _. The jury convicted the defendant as charged. On appeal, the primary issue concerned the exclusion of the expert testimony.

Circuit Analysis Of Excluded Expert Testimony

The Fifth Circuit concluded that the trial court erred by the “wholesale” exclusion of the defense expert testimony. As the circuit noted, the government had not objected to all of the testimony, only the comparison testimony.

With regard to the exclusion of the comparison testimony, the trial court also erred. Challenges to the expert’s lack of personal experience and specialization went to the weight of the evidence, not the admissibility of his testimony. As the circuit explained, any lack of experience "should not ordinarily disqualify an expert, so long as the expert is qualified based on some other factor [besides experience] provided by Rule 702," such as knowledge, skill, training or education. The expert’s testimony was not “not strictly confined to his area of practice, but may testify concerning related applications.” Liu, _ F.3d at _ (quoting Wheeler v. John Deere Co., 935 F.2d 1090, 1100 (10th Cir. 1991); Whitehouse Hotel Ltd. P'ship v. C.I.R., 615 F.3d 321, 331 (5th Cir. 2010) (affirming trial court's qualification of a licensed real estate appraiser as an expert witness when the case concerned a “specialized” appraisal issue); Quinton v. Farmland Indus. Inc., 928 F.2d 335, 337–38 (10th Cir. 1991) (veterinarian expert need not be a specialist in toxicology to testify about the toxic effect of a substance on dairy cows); 4 Jack B. Weinstein & Margaret A. Berger, Weinstein’s Federal Evidence § 702.04(1)(a) (Joseph M. McLaughlin ed., 2d ed. 1997) (“[I]t is an abuse of discretion for a trial court to exclude expert witness testimony on the ground that the witness is not qualified to render the opinion at issue because the witness lacks a certain educational or other experiential background.”)). As the circuit explained,

Because of Ostermiller’s training and experience as a chemical engineer and his broad experience in chemical plants including polymer plants, we conclude that the district court abused its discretion in excluding his opinion testimony related to the manufacturing of CPE.

Liu, _ F.3d at _ (footnote omitted) (citing Martin v. Fleissner GmbH, 741 F.2d 61, 64 (4th Cir. 1984) (“[A] lack of direct experience is not a sufficient basis to reject [expert’s] testimony, but may affect the weight that testimony is given, a decision properly made by the jury.”)).

Assessing Whether The Exclusion Was Harmless

Given the error, the circuit turned to whether it was harmless error under FRE 103(a). The circuit noted that its ability to review the evidence was limited to the record. The defense could not show that the exclusion fo the expert testimony mattered. As the circuit explained:

It is important for us to point out that defense counsel’s failure to submit a contemporaneous proffer of Ostermiller’s testimony makes it difficult to assess how helpful Ostermiller’s testimony would have been to Liou in persuading the jury that Liou was truthful when he testified that he did not believe that the documents he was sending to the Chinese contained Dow trade secret information. Liou relies in part on an affidavit prepared by Ostermiller in connection with Liou’s Motion for New Trial as to the substance of what Ostermiller’s testimony would have been. Yet Federal Rule of Evidence 103(a) provides that a party “may claim error in a ruling to admit or exclude evidence only if the error affects a substantial right of the party” and if a “ruling excludes evidence, a party informs the court of its substance by an offer of proof, unless the substance was apparent from the context.” Fed. R. Evid. 103(a)(2).... Because Liou did not make an offer of proof that would have put the district court on notice of the substance of Ostermiller’s testimony, the only information the district court had—and the only information we should consider—is that Ostermiller sought to testify about general engineering knowledge and about equipment used in the manufacturing of CPE that was in the public domain. If Ostermiller had compared the Dow design drawings and the design drawings Liou furnished to the Chinese, the record does not establish, and we can not determine, the extent to which he would have found them similar. In light of this, Liou can not point to anything in the record indicating that Ostermiller’s testimony would have been helpful to the defendant in rebutting the Government’s evidence that Liou conspired to steal what he believed to be trade secrets from Dow to sell to the Chinese companies.... In summary, given the overwhelming evidence that Liou and his coconspirators stole trade secrets from Dow and that Liou believed he was stealing trade secrets, we are persuaded that Ostermiller’s testimony would have been of little or no benefit to the defendant. We therefore conclude that the exclusion of Ostermiller did not affect the verdict.

Liu, _ F.3d at _ (footnotes and citations omitted).

Summary: Necessity Of Sufficient Record

The Liu case underscores the importance of not only preserving an objection to a trial court ruling on evidence but also the need to ensure the record is sufficient for appellate review. In the case, the trial court error could not be fully asssessed based on defense counsel's "failure to submit a contemporaneous proffer" of the expert testimony. As the circuit noted, Fed. R. Evid. 103(a)(2) permits a party to make "an offer of proof, unless the substance was apparent from the context.”


Photo Description: The John Minor Wisdom Court Of Appeals Building, Fifth Circuit Court of Appeals, New Orleans, LA.


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