Courts Cannot Exclude Expert Testimony Without Reason, US Appellate Court Rules

Conducting a Daubert analysis is a required gatekeeping function of the district courts, a US appellate court has ruled, reversing a district court's exclusion of an expert witness after it did so without providing the basis for its decision.

In Adamscheck v. American Family Mutual Ins., US App. Ct., 10th Cir., Mar 29, 2016, Patrick Adamscheck claimed unreasonable denial of benefits, breach of contract, and bad faith against his insurer, American Family after it rejected his $500,000 claim under a personal automobile insurance policy for underinsured motorist (UIM) coverage.

Adamscheck had been working as a Deputy Sheriff, driving in Colorado Springs, when his vehicle was rear-ended by Ms. Darian Agan. He settled with Agan for $25,000, her liability policy limit. He also received workers' compensation benefits.

Adamscheck asserted, however, that he had severely injured his lower back and had incurred damages in excess of $25,000. He claimed $185,000 in existing economic damages, including past medical expenses and lost wages, and he also sought recovery of his future medical care, future wage loss, and permanent disability, along with non-economic damages. Adamscheck filed a claim under his personal automobile insurance policy issued by American Family for the full $500,000 of his UIM coverage.

American Family offered to settle for $65,000, but Adamscheck rejected it and filed suit, asserting claims for unreasonable denial of benefits, breach of contract, and bad faith.

American Family disputed the cause and extent of Adamscheck's injuries. It asserted that he had exaggerated his symptoms, that the lowspeed impact of the accident could not have caused the extensive injuries he claimed, and that what symptoms he did have could be attributed to a previously documented workplace injury. American Family noted that no injuries were reported at the scene of the accident, Adamscheck's vehicle had only $391 in damage to the rear bumper, and video surveillance showed Adamscheck after the accident engaging in activities that they believed showed he was misrepresenting the severity of his injuries.

To support their case, American Family retained a biomechanical engineering expert witness, Dr. Jeffrey P. Broker, but Adamscheck's legal counsel, Joseph R. Winston, filed a motion in limine challenging Broker's testimony. At the final pre-trial conference, the district court summarily excluded Broker's testimony:

THE COURT: … So what are the — I don't do motions in limine. I don't know what you're contemplating here.

MR. WINSTON: Your Honor, I think the motion in limine that we were filing is — they have a biomechanical engineer who I think his opinion is that, given the forces from the accident, he couldn't have been hurt in the type of accident that occurred. And that kind of testimony — there are lots of District Court opinions, and I think there's a Court of Appeals —

THE COURT: Well, I wouldn't allow that.

MR. WINSTON: Okay, well, that's what our motion in limine was, that he couldn't have been hurt in the accident because he —

THE COURT: Well, I wouldn't allow that kind of testimony. So forget that.

MS. SUTTON: I won't ask that question.

THE COURT: Well, you won't call that witness.

MS. SUTTON: Well, I might give it a shot if you'll let me lay foundation for, I think, some opinion testimony and an explanation for the vehicle dynamics, what happens in a rear-end collision, the nature of the injury he sustained.

THE COURT: You know, every rear-end collision, something happens differently.

MS. SUTTON: It does. And I —

THE COURT: Yeah, it does. And you can make a proffer, but I won't allow that kind of testimony.

MS. SUTTON: Okay.

THE COURT: You can make a proffer during the trial.

At a subsequent trial preparation conference, the district court stated that it had "already excluded" Dr. Broker's testimony, but would "do it officially on the record in the course of the trial so that it's an appropriate proffer."

The jury returned a verdict in favor of Adamscheck, and the district court entered a total judgment of $1.4 million, including $122,936 in attorneys' fees and $32,970 in costs. American Family appealed, arguing that the trial court erred on several grounds, including its exclusion of Broker. American Family argued that because the district court summarily excluded Broker's testimony without providing the basis for its decision, the court failed to perform its gatekeeping function under Fed Rule 702 and under Daubert.

The US appellate court agreed with American Family. Although the district court has discretion in deciding how to conduct a Daubert analysis, the court found "there is no discretion regarding the actual performance of the gatekeeping function." (Goebel v. Denver & Rio Grande W. R.R. Co., 215 F.3d 1083, 1087 (10th Cir. 2000).).

Adamscheck contended that the district court had all the information it needed in the proffer to reject Broker's testimony. However, the appellate court noted that nothing in the record suggested the district court ever reviewed or evaluated Broker's expert report. The district court excluded the Broker's testimony months before it received the proffer, based solely on Winston's one-sentence characterization of Broker's opinions.

The appellate court found that Broker's testimony was critical to American Family's causation theory, which it had intended to offer as an alternative to Adamscheck's and his medical experts' opinion that his debilitating injuries were caused by the accident. By excluding Broker's testimony, the jury was left with only expert evidence that supported Adamscheck's theory. The appellate court found the district court's error not to be harmless, that the district court had abused its discretion.

The appellate court vacated the verdict and remanded for a new trial.