110 A.3d 1257
Del. Ch.2015Background
- In re Dole Food Co., Inc. stockholder litigation and appraisal proceedings arising from a take-private, consolidated cases in the Delaware Court of Chancery (C.A. Nos. 8703-VCL and 9079-VCL).
- On July 5, 2014, the defendants designated Stifel, Nicolaus & Company, Incorporated as its expert on Dole’s value, with opening and rebuttal reports signed by Ferguson and Securro (not personally).
- Plaintiffs noticed a Rule 30(b)(6) deposition of Stifel; Ferguson testified as the biological person most knowledgeable about the reports.
- During deposition, defense counsel asserted that “Stifel is the expert” when Ferguson claimed authorship.
- The court must decide whether a corporation may serve as an expert witness; it holds a corporation cannot, and confirms the proper path is to substitute the biological person (Ferguson) who would testify on the corporation’s behalf if he adopts the reports.
- Conclusion: Ferguson has a body and brain and can serve as an expert if qualified; Stifel cannot testify as the corporation’s expert.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can a corporation serve as an expert witness under the rules? | Plaintiff argues a corporation may testify as the expert. | Defendant argues a corporation may act as the expert. | No; a corporation cannot serve as an expert witness. |
| If not, may a biological employee substitute and testify adopting the corporation’s expert reports? | Plaintiff contends substitution would prejudice continued representation. | Defendant contends substitution is permissible to avoid prejudice. | Yes; Ferguson may testify if he adopts Stifel’s reports. |
Key Cases Cited
- Daimler AG v. Bauman, 134 S. Ct. 746 (U.S. 2014) (corporate entity acts only through its agents)
- N. Assur. Co. v. Rachlin Clothes Shop, 125 A. 184 (Del. 1924) (corporation lacks mind and testimony must be by natural persons)
- Trustees of Dartmouth Coll. v. Woodward, 17 U.S. 518 (U.S. 1819) (corporation as artificial being acting through agents)
- In re Activision Blizzard, Inc., 86 A.3d 531 (Del. Ch. 2014) (court can compel live testimony of corporate officers and agents)
- Hamilton P’rs, L.P. v. Englard, 11 A.3d 1180 (Del. Ch. 2010) (jurisdiction to compel production of corporate witnesses)
- Essgee Co. of China v. U.S., 262 U.S. 151 (U.S. 1923) (corporation cannot testify)