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Univ. of South Carolina School of Law

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Monday, April 28, 2014

Nothing Sucks Like an Electrolux: SDNY Finds Art Expert's Report Inadmissible in Action Against Electrolux

Federal Rule of Evidence 702 provides that

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:  

(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;  

(b) the testimony is based on sufficient facts or data;  

(c) the testimony is the product of reliable principles and methods; and  

(d) the expert has reliably applied the principles and methods to the facts of the case.

It's not unusual to see a case in which an expert's opinion testimony is excluded after the court find that the testimony was the product of unreliable principles and methods. It's much rarer to find a case in which the court finds that an expert applied reliable principles and methods but that the expert did not reliably apply those principles and methods to the facts of the case. This takes me to Oleg Cassini, Inc. v. Electrolux Home Products, Inc., 2014 WL 1468118 (S.D.N.Y. 2014).

In Electrolux

on August 3, 2008, an under-the-counter dryer manufactured by the defendant allegedly caused a fire at the plaintiff's property....The plaintiff claims that the dryer was defective, and seeks damages under theories of strict product liability, negligence, breach of warranty, and violations of New York consumer protection laws....

The fire resulted in significant property damage, including smoke and water damage; the plaintiff alleges that it destroyed “original sketches, drawings, and artwork by renowned fashion designer Oleg Cassini” that were stored in the basement of the property.

The plaintiff thereafter hired Phillis Rogoff to examine and assess the value of the damaged artwork, and Rogoff subsequently prepared a report documenting her findings. In response, Electrolux filed a motion in limine to exclude that expert report.

In addressing this motion, the Southern District of New York noted that 

The comparative market data approach was used in establishing a value. The appraised property was compared to the same or similar items offered for sale at the time of the fire at the estate of the late Mr. Casinni [sic]. Both the Income and Cost Approaches were determined to be inappropriate. There is an active retail and secondary market for original designs of this quality and provenance. A blockage discount of 20% was applied since there was a large number of original designs, sketches, fabric repeats, photographs and other artwork.

The court then found this to be a reliable technique:

While the defendant argues that “it is not possible to determine the reliability of [Ms.] Rogoff's proffered opinions” and that it is “not possible to test [those] opinions”..., the focus of its motion is on the application of the appraisal method to the facts of this case, rather than the method itself. The defendants do not appear to challenge the comparative market approach allegedly used by Ms. Rogoff, a technique that has been accepted by other courts in art appraisal cases. See Davis, 937 F.Supp.2d at 415 (“Appraisers ... rely upon compliance with [ASA and USPAP] standards, among others, to produce expert art appraisal opinions that reflect accepted professional wisdom and methodological rigor.... Whether understood as a scientific method under Daubert or as a form of specialized knowledge under Kumho Tire, art appraisal pursuant to these established methodologies might be admissible in federal court under Rule 702.”); see also Joseph P. Carroll Ltd. v. Baker, 889 F.Supp.2d 593, 600–01 (S.D.N.Y.2012) (describing the market comparison approach); Estate of Mitchell, 101 T.C.M. 1435, at *13–14 (conducting detailed analysis of comparable paintings used by proposed art appraisal experts under comparative market approach).

That said, the court ultimately deemed the report inadmissible under Federal Rule of Evidence 702(d), concluding that

I have no way of assessing whether Ms. Rogoff's application of the comparative market data approach to those facts was reliable. The Expert Report includes photos of the destroyed artwork and the values assigned to those works, but lacks any “actual calculations with detailed and complete information elucidating how the expert arrived at the damage figure.”...Indeed, the report contains only two terse paragraphs explaining what the market comparison approach is, and fails to explain how Ms. Rogoff applied that approach to the nature and quality of the works she viewed in order to arrive at the dollar values she assigned to each piece. The report fails to provide sufficient information regarding how Ms. Rogoff compared Mr. Cassini's sketches to other similar works in order to ascertain their value—whether she looked at auctions or private sales, when comparable sales occurred, and what factors were considered in selecting the comparable works and how those factors were weighed....And while Ms. Rogoff made passing reference to industry appraisal standards, she did not provide any insight into how she applied those standards in this case.

-CM

http://lawprofessors.typepad.com/evidenceprof/2014/04/federal-rule-of-evidence-702provides-that-a-witness-who-is-qualified-as-an-expert-by-knowledge-skill-experience-training.html

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