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Univ. of South Carolina School of Law

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Monday, May 7, 2012

Prejudging: 6th Circuit Finds No Problem With Judge Arriving At Daubert Hearing With Opinion Already Written In Fen-Phen Appeal

There's a certain law review that we joke about at my law school. Whenever any of us submit to this law review, we invariably receive an e-mail response within the hour thanking us for our submission but informing us that after careful consideration our article was not selected for publication. Either the members on this law review are the speediest of speed readers semester-in and semester-out, or our submissions go straight from our e-mail accounts into the law review's steel cylinder (e-cylinder?). Of course, in the grand scheme of things, it doesn't take much to see that the problems of three law professors don't amount to a hill of beans in this crazy world. But what if basically the same thing happened to lawyers after a Daubert hearing? That was the question addressed by the Sixth Circuit in its recent opinion in United States v. Cunningham, 2012 WL 1500180 (6th Cir. 2012).

In Cunningham

Shirley Cunningham, Jr., and William Gallion were two of three Kentucky lawyers who represented several hundred Kentucky clients in a mass-tort action against the manufacturer of the defective drug "fen-phen." They settled the case for $200 million, which entitled them under their retainer agreements to approximately $22 million each in attorney fees. But rather than limit themselves to what they had contractually earned, Cunningham and Gallion concocted a fraudulent scheme to take from their clients almost twice that amount. The scheme did not work out as planned: Cunningham and Gallion were caught, subsequently disbarred from practicing law in Kentucky, and indicted on one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. ยง 1343 and 1349.

After a mistrial, a superseding indictment was issued that again charged Cunningham and Gallion with one count of conspiracy to commit wire fraud, but added eight counts that specifically detailed the wire communications that were part of the scheme. The two men were convicted on all counts at their second trial. 

After they were convicted, Cunningham, Jr. and Gallion appealed, claiming, inter alia, that the district court erred in precluding the testimony of Richard L. Robbins, an expert in litigating complex business matters, including class actions. Robbins testified at the first trial and would have testified at the new trial regarding

the responsibility to provide notice to the putative class members; whether the class action was properly decertified; whether Mr. Gallion could properly hold back settlement funds for future contingencies pursuant to a settlement agreement; the propriety of attorney fees in awards in class actions or mass plaintiff actions; and whether a "cy pres" distribution of settlement funds is an appropriate practice in class action [sic].

The district court, however, precluded Robbins from testifying after a Daubert hearing...right after the Daubert hearing. This timing was one of the grounds for the defendants' appeal. The first of the grounds for the defendants' appeal was

the timing of the district court's memorandum opinion, which was released a few minutes after the Daubert hearing had concluded. According to the defendants, the district court erred by arriving at the hearing with a written opinion already in hand, particularly because there was no expectation that the judge would immediately issue a ruling at the end of the hearing.

The Sixth Circuit, however, found no problem with this timing, concluding that,

even if, under such circumstances, the better practice is for judges to prepare their written opinions after having had the benefit of hearing the parties orally argue their positions, this does not mean that the district court erred by not doing so here. The defendants cite no authority for the proposition that a district court's decision to prepare an opinion in advance of a hearing is grounds to set aside that opinion on appeal. This proposition seems especially dubious in the context of a Daubert hearing, a hearing that this court has held is not even required where "the record on the expert testimony was extensive, and the Daubert issue was fully briefed."

Moreover, the Sixth Circuit found that

The district judge here presumably used the Daubert hearing as a final opportunity for the defendants to dissuade him from the analysis set forth in the tentative opinion, an endeavor in which they were obviously unsuccessful. Their lack of success, however, provides them with no basis to set aside the ruling

Really? The Sixth Circuit's opinion seems tone deaf to me. Sure, the district court didn't need to hold a Daubert hearing, but once it decided to hold one, didn't it have an obligation to go into the hearing with an open mind? How much time did defense counsel spend preparing for the hearing, and at what cost to the defendants? If the defendants or defense counsel knew that the judge had already reached a conclusion regarding the (in)admissibility of Robbins' expert testimony, would they have even asked for a Daubert hearing?

And I don't care about what the Sixth Circuit presumed that the district judge did. Several cognitive biases, including the confirmation bias, would tell us that the pre-written opinion meant that the judge was not conducting the hearing in a neutral manner. The fact that the judge issued his pre-written opinion minutes after the hearing only corroborates this claim.

Finally, it is not like the judge was considering the admissibility of something consistently deemed inadmissible like polygraph evidence. Robbins was allowed to testify at the first trial and was seeking to present essentially the same testimony at retrial. The district court's perfunctory Daubert hearing, in my mind, was insufficient to withstand appellate scrutiny.

(Hat tip to Richard Underwood for the link)

-CM 

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Comments

Actually, the trial judges Daubert analysis was odd, but surely irrelevant. The Appellate Court assumed the witness was qualified, but (properly) upheld the trial judge's exclusion of the testimony. The fact that it was admitted in the first trial is a so what. The evidence what overwhelming, and this case is at the end of the road.

Posted by: Rick Underwood | May 7, 2012 1:37:11 PM

I agree with the appeals court. You ask, "once it decided to hold one, didn't it have an obligation to go into the hearing with an open mind?"

No.

I guess I don't think too much of oral argument to begin with and I think many judges go into hearings with closed minds. This judge was just a little bit too obvious about that fact (shame shame) but it's not worth overturning the ruling just to make an obtuse point about gamesmanship.

Posted by: Daniel | May 7, 2012 9:38:36 PM

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