Allstate Insurance v. Electrolux Home Products, Inc.Allstate Insurance v. Electrolux Home Products, Inc.
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Electrolux Home Products Inc.’s Motion to Strike Expert Report or Disqualify Expert From Offering Testimony. Pursuant to
Defendant alleges that Keefe, in forming his expert opinion, considered documents that are subject to a confidentiality agreement (“Confidential Documents”) between Defendant and a third party (“Carrier One”) in an unrelated arbitration proceeding involving a similar claim that Defendant’s dryer caused a fire. For the reasons set forth below, the Court denies Defendant’s motion to strike Keefe’s report or disqualify Keefe from testifying. As stated during the hearing on December 14, 2011, the Court orders Keefe to amend his expert report to eliminate any reference to the Confidential Documents and to reflect his testimony that he did not rely
I. BACKGROUND FACTS
A. THE LITIGATION.
On September 1, 2006, John Clark experienced a fire at his residence in Lake Forest, Illinois. Pursuant to an insurance policy, Allstate paid Clark $202,924.96 for the damages resulting from the fire. Allstate investigated the fire and determined that the cause of the fire was an accumulation of lint in the heat vent at the rear of the dryer drum from a Frigidaire brand clothes dryer manufactured by Electrolux. In this lawsuit, Allstate, as subrogee of John Clark, seeks to recover damages from Electrolux resulting from that fire. Allstate brought the suit in the Circuit Court of Lake County under theories of strict liability, negligence, and breach of implied warranty. Dkt. 1. Electrolux removed this suit to this Court on October 12,2009. Id.
1. The Keefe Expert Report.
In the course of discovery, Allstate designated Keefe as their expert. Keefe prepared and submitted a detailed sixteen page expert’s report in accordance with
The report then proceeds through a detailed nine page discussion and analysis of the dryer at issue. The report reviews the May, 2003 Consumer Products Safety Commission Report on Electric Clothes Dryers and Lint Ignition. The report explains that Keefe has been involved in approximately fifty investigations of fires that originated with Electrolux dryers of this type and that the patterns of lint accumulation were similar.
Keefe issued eight detailed opinions over three pages based on his education, training and experience, inspection and testing performed in this investigation, and the facts contained in the materials. Keefe attached a complete curriculum vitae and a list of twenty-eight cases in which he has testified as an expert over the past four years. As Appendix I, he listed forty categories of information and documents reviewed and relied upon. Only half of these are specifically mentioned in the report.
2. Prior Arbitration Proceeding Involving Electrolux.
In 2007, Electrolux entered into a binding arbitration agreement (“Arbitration Agreement”) with Carrier One, a third party insurance carrier which mandated arbitration of any subrogation claims for amounts under a certain threshold arising from Electrolux products.
Subsequently, Electrolux and Carrier One submitted to arbitration in at least one case in which Keefe was retained as a consulting expert for Carrier One. Pursuant to the Arbitration Agreement, the ar
3. The Reference to Confidential Information in Keefe’s Expert Report.
In the case at bar, Allstate submitted to Electrolux a report pursuant to
Keefe’s deposition testimony was ambiguous on what, if any, confidential information he relied upon. Keefe Dep. 21:2-15 (Def. Mem. Ex. B). When Electrolux inquired specifically about the contents of the Confidential Documents, Allstate’s counsel objected and prevented Defendant from pursuing the line of questioning. Id. at 22:18-25:12. This left Defendant in a tough spot: it did not want to violate the confidentiality of those documents, but it wanted to be able to cross-examine Keefe on all materials that he considered and rejected or considered and relied upon in forming his opinion.
Electrolux urges the Court to find that Allstate has not complied with
The Court has reviewed, in camera, the Arbitration Agreement, the Confidential Documents to which Keefe was privy, and Keefe’s expert report in the current matter.
The parties completed briefing on the motion and the Court held oral arguments on December 14, 2011. In the interest of resolving the issue, Allstate’s counsel asked Keefe to be present in court. Both the Court and counsel for each side questioned Keefe on his use of the Confidential Documents in preparing his report.
Keefe explained to the Court that in preparing Appendix I of his report (“Information & Documents Reviewed and Relied Upon”) he listed all the documents that he reviewed and studied in preparing the report, as well as information that was part of his background. Keefe testified that many of the Confidential Documents he reviewed in the Carrier One arbitration were duplicative of documents he had which were not confidential. Hr’g Tr. 43.
Regarding the documents that are confidential, Keefe explained that he received those documents and reviewed them for his work on the arbitration matter: he did not read, study, or review those documents as part of the work process in preparing his report in this case. Id. at 61-65. Keefe testified several times that, absent knowledge of the Confidential Documents, his opinions in the present case would be the same. Id. at 43-44, 65-66. He statéd that if the Court ordered him not to rely on the information he learned in the arbitration proceedings, he would not need to revise his expert report. Id. at 46.
II. LEGAL STANDARDS
A. FEDERAL RULE OF CIVIL PROCEDURE 26.
(i) a complete statement of all opinions the witness will express and the basis and reasons for them;
(ii) the facts or data considered by the witness in forming them;
(iii) any exhibits that will be used to summarize or support them;
(iv) the witness’s qualifications, including a list of all publications authored in the previous 10 years;
(v) a list of all other cases in which, during the previous 4 years, the witness testified as an expert at trial or by deposition; and
(vi) a statement of the compensation to be paid for the study and testimony in the case.
A review of the recent history of the standards for discovery relating to testifying experts begins with the 1993 amendments, which required a testifying expert to provide a report setting forth a complete statement of the expert’s opinions and “the data and other information considered by the witness in forming the opinions.” The rule was amended in 2010 to require the disclosure of “facts or data”
B. FEDERAL RULE OF CIVIL PROCEDURE 37.
The sanctions for noncompliance with disclosure requirements are found in
C. DISQUALIFICATION OF EXPERTS.
Courts have the power to disqualify an expert witness to protect the integrity of the adversary process and to promote public confidence in the legal system. Lifewatch Serv., Inc. v. Braemer Inc., No. 09 C 6001,
Disqualification is a “drastic measure which courts should hesitate to impose except when absolutely necessary.” BP Amoco Chem. Co. v. Flint Hills Res.,
III. ISSUES PRESENTED
1. Whether an expert may consider or rely upon confidential information, which has not been produced to the other side, in an expert report.
ANSWER: No.
2. Whether a party may cross-examine an expert on confidential information which the expert has seen in another similar case, but which has not been produced, considered, or relied upon in the present case.
ANSWER: No.
3. Whether an expert witness should be disqualified from testifying be
ANSWER: No.
IV. DISCUSSION
The goal of
Electrolux expressed a number of legitimate concerns when it learned that Keefe listed the' Confidential Documents in the appendix to his expert report. Electrolux was concerned that Keefe would select certain information from the Confidential Documents, supportive of his opinion, to use in drafting his report. Defendant determined that it would not be able to cross-examine Keefe on his use of those documents without breaching the confidentiality provision. Electrolux was also concerned that Allstate was making an end run around the
Further, Electrolux is entitled to the benefit of its bargain: the arbitration agreement says that “neither the content nor the results of the arbitration may be used in any other proceeding.” The issue is not limited to Electrolux’s own waiver of the confidentiality provision. Even if Electrolux waived its own right to confidentiality, using those documents to cross-examine Keefe would violate the agreement with Carrier One.
A. PLAINTIFF ALLSTATE HAS NOT VIOLATED RULE 26 BY NOT PRODUCING THE CONFIDENTIAL DOCUMENTS REFERENCED IN KEEFE’S LIST OF “INFORMATION & DOCUMENTS REVIEWED AND RELIED UPON.”
The purpose of
The Seventh Circuit has discussed the emphasis on total disclosure. Salgado,
Keefe should not consider, rely upon, or list the Confidential Documents in his
During the December 14, 2011, hearing, the Court endeavored to determine whether Keefe actively considered or relied on the documents, or if they were simply part of his background knowledge. Keefe’s testimony before this Court affirmed that he. did not rely upon the Confidential Documents as he formed his opinion, even though he listed them under “Information and Documents Reviewed and Relied Upon.” None of his opinions are based on that material. Keefe described the work process he engaged in when preparing his expert report in this case. Hr’g Tr. 61. He was clear that he did not review any of the Confidential Documents as part of that work process. Id. The documents were not given to Keefe to assist in drafting his report on the Clark dryer fire.
Allstate argues that Keefe cannot erase from his memory information he learned from the confidential documents and those materials are only relevant to the extent that they are part of his “background and
Keefe explained that he listed “Information on Electrolux dryer fires subject to confidentiality agreements” because he thought it was important for Electrolux to know of his involvement in those cases. Id. at 47-48. He consulted with his client (Allstate) and determined that designating the documents as confidential, but listing them, was an appropriate step. Id. at 48. The Court believes it was professionally responsible, but not required, for Keefe to take steps to ensure Electrolux knew of his access to those documents, even if they were not considered or relied upon in forming his opinion. Such candor is commendable, but he should not have included the information in Appendix I.
B. ONLY THE REFERENCE TO THE CONFIDENTIAL INFORMATION IN THE EXPERT REPORT SUBMITTED BY KEEFE WILL BE STRICKEN.
1. The Appropriate Remedy is to Strike All References to the Confidential Documents.
Experts, by necessity, bring a plethora of background knowledge gathered from their professional experience. It is this experience that makes them experts. To prohibit experts from testifying because they have obtained the very experience and expertise that we value, which they list in the interest of candor, undermines the valuable role of experts in litigation. Keefe testified that the Confidential Documents are simply part of his background knowledge and he did not actively consider those documents in forming his opinion in the present case. As Keefe’s report would not change absent access to the Confidential Documents, the appropriate remedy is to strike any reference to those documents from his report. The remedy herein maintains the confidentiality of the documents without putting Electrolux at an unfair disadvantage and thus keeps with the spirit of
2. Even If There Was a
Electrolux urges the Court to strike the expert report and prohibit Keefe from testifying pursuant to
Keefe acknowledged that he received and reviewed confidential documents in at least one case controlled by the Arbitration Agreement and that those documents, in addition to his previous investigations of Electrolux dryer fires, were part of his background knowledge. Electrolux possessed those documents. Allstate did not want Keefe to violate a confidentiality provision to which he was subject. The decision to not produce the documents was substantially justified given the factual circumstances.
Further, the failure to produce the documents, and Keefe’s “consideration” of them in the broadest sense, was harmless. Electrolux has not identified any particular harm or prejudice resulting from the failure to produce the confidential documents other than a broad statement that it cannot fully cross-examine Mr. Keefe. The Court finds that Keefe’s opinion relies on his own investigation, other non-confidential information, and his general expertise in the field of dryer fires. There is no mention in the report of reliance on his work on the Electrolux dryer fire case involved in the Carrier One arbitration. Electrolux has suffered no unfair surprise or inability to understand what Keefe will testify.
Considering the final factor, the Court does not find bad faith on the part of Allstate. Electrolux argues that GHSGO provided the documents to Keefe in their capacity as counsel to Allstate after obtaining the documents from the Carrier One file. There is no evidence to support this contention. When the Court ordered Allstate to produce the Confidential Documents for in camera review, GHSGO’s attorney submitted an affidavit attesting that the documents were obtained from Keefe in a sealed package, which was in turn delivered to this Court. Electrolux’s claim that GHSGO attorneys supplied the documents to Keefe in their capacity as Allstate’s attorneys, rather than in their capacity as Carrier One’s attorneys, is simply without evidentiary foundation.
The Court notes that in those cases in which expert reports were stricken, the violation was far more severe than the present case. See, e.g., Ciomber,
C. DISQUALIFICATION OF ALLSTATE’S EXPERT KEEFE IS NOT NECESSARY TO MAINTAIN THE INTEGRITY OF THE ADVERSARY PROCESS OR PROMOTE PUBLIC CONFIDENCE IN THE LEGAL SYSTEM.
Courts have inherent authority to disqualify expert witnesses to protect the integrity of the adversary process and to promote public confidence in the legal system. Lifewatch Serv., Inc. v. Braemer, No. 09 C 6001,
The cases in which experts are disqualified are generally limited to the situation in which an expert has obtained confidential information directly from the moving party and then testifies for the opponent. See, e.g., Lifewatch Serv.,
In Chamberlain, the district court explained: “Courts that have disqualified experts on conflict of interest grounds do so when the expert ‘switches sides’ in the same litigation. Under those circumstances, the risk of disclosure of confidential information is high and the public’s trust in the integrity of the judicial system is at stake.” Chamberlain,
Keefe has never served as an expert for Electrolux, but rather for parties adverse to Electrolux. Electrolux’s confidential relationship with Keefe is not direct: the Arbitration Agreement was between Electrolux and Carrier One, refers only to the
In ordering Keefe to strike any reference in his report to the Confidential Documents he obtained that were not duplicative of non-confidential material, the Court essentially asks Keefe to compartmentalize the information he learned in those other matters; he must exclude that information from the basis for his opinions. This may sound like a difficult task, but the Court notes that it is the same feat we ask of juries and judges on a daily basis. When testimony is stricken during a trial, jurors are instructed to not consider that information in their deliberations. When a judge grants a motion in limine to exclude evidence before a bench trial, he or she must disregard information learned when deciding the motion. Similarly, Daubert motions which are granted in part require a judge to “forget” information. To ask an expert to “forget” or exclude information obtained in one case while forming an expert opinion in another case is not an impossibility; rather, it is a task performed by various individuals in the court system each day. The Court is convinced that Keefe has compartmentalized the confidential information and that information does not impact his opinion in the present matter. Accordingly, all references to confidential information should be stricken from his report.
y. CONCLUSION
For the reasons set forth in this opinion, the Court denies Defendant’s Motion to Strike Expert Report or Disqualify Expert from Offering Testimony. In order to maintain a level playing field under
1. Keefe shall not consider or rely upon confidential information received in the Carrier One arbitration in the preparation of his expert report in this case.
2. Keefe shall strike any reference to such information from the Appendix to his report and otherwise modify his report if necessary.
3. Keefe must produce all non-confidential information considered and relied upon in the preparation of his report, if he has not already done so.
4. Defendant shall not cross-examine Keefe on any confidential information from the Carrier One arbitration.
5. To the extent identical or similar information marked confidential in the Carrier One arbitration has been produced in a non-confidential form elsewhere, it may be considered and relied upon by Keefe in the preparation of his expert report or used by Defendant in cross-examining Keefe.
Notes
. The Court has reviewed the Arbitration Agreement in camera.
. "Def. Mem.” refers to Defendant Electrolux Home Products, Inc.'s Memorandum of Law In Support of Its Motion To Strike Expert Report Or Disqualify Expert From Offering Testimony, Dkt. 59.
. The Court noted that the Agreement was not signed by Keefe. Upon questioning, Keefe stated that he understood that he should not use the confidential documents or produce the documents to other people because they were confidential. Hr'g Tr. 48, Dec. 14, 2011.
. “PL Resp.” refers to Plaintiff Allstate Insurance Company’s Opposition To Defendant’s Motion To Strike Expert Report Or Disqualify Expert From Offering Testimony, Dkt. 64.
. GHSGO's possession of the documents in their representation of Carrier One does not mean they have those documents for purposes of their representation of Allstate.
. All citations to "Hr'g Tr.” in this opinion refer to the hearing held on December 14, 2011.
. In its brief, Allstate argued that Electrolux waived its right to disclosure under
. It is likely that Electrolux would have been equally, if not more, upset, if it learned of Keefe’s role as a consulting expert in the arbitration at a later date.
. Allstate also argues in its brief that because Electrolux has the confidential documents, they must be seeking the opinions that Keefe developed in the Carrier One matter. Allstate argues that