Free Response to Motion - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE KENNETH S. MITCHELL, Plaintiff, v. WACHOVIA CORPORATION, t/a WACHOVIA SECURITIES, WACHOVIA SECURITIES, L.L.C., WACHOVIA SERVICES, INC., WACHOVIA BANK OF DEL, N.A., TODD D. GAUTHIER, CAROLYN J. BEAM, and DOROTHY A. DIFEBO, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) )

C.A. No. 06-725 (GMS) JURY TRIAL DEMANDED

PLAINTIFF'S RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION IN LIMINE TO PRECLUDE TESTIMONY OF PLAINTIFF'S ECONOMIC EXPERT

BIGGS AND BATTAGLIA Victor F. Battaglia, Sr. (Del. Bar #156) Steven F. Mones (Del. Bar #2611) 921 N. Orange Street P.O. Box 1489 Wilmington, DE 19899-1489 Tel: 302-655-9677 Fax: 302-655-7924 [email protected] Attorneys for Plaintiff April 10, 2008

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Plaintiff Kenneth S. Mitchell responds as follows to defendants' motion in limine seeking to bar or limit the scope of the testimony of plaintiff's economic expert: Plaintiff, a Financial Advisor employed by the Wachovia defendants, is pursuing claims of race and gender discrimination, and other related claims, under federal and state law. Plaintiff identified Robert F. Minnehan, Ph.D., an economic consultant, as his economic expert for trial. Plaintiff submits that defendants' objections to Dr. Minnehan's testimony go to the weight of the evidence, not to the admissibility of the evidence, and hence, should be denied. Admissibility of expert testimony under the "gatekeeper" standard is governed by Daubert v. Merrill Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). There are no definite standards for evaluating the admissibility of expert testimony. Consistent with the Federal Rules of Evidence (particularly Rule 702), key factors include the expert's qualifications and experience, whether the evidence is reliable, and whether the evidence will assist the trier of fact in evaluating the issues. Id. at 591-593. Courts favor a liberal policy towards expert testimony, and "doubts about whether an expert's testimony will be useful should generally be resolved in favor of admissibility." Finch v. Hercules, Inc., 941 F.Supp. 1395, 1415 (D.Del. 1996) (quoting In re Japanese Elec. Prods. Antitrust Litig., 723 F.2d 238, 278 (3d Cir. 1983), rev'd on other grounds, sub nom. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986)). In this case, plaintiff is seeking to offer testimony of a well-respected economic consultant1 who: (a) interviewed plaintiff on several occasions; (b) reviewed and analyzed financial information based on plaintiff's past performance with Wachovia; (c) reviewed and analyzed financial information about Wachovia itself and its Financial Advisors; and (d) extrapolated future figures from the past information, the likely economic trends, as well as Dr. Minnehan has testified before in this Court as an economic expert. Schatzman v. Martin Newark Dealership, Inc., 233 F.Supp. 620, 622 (D.Del. 2001). 2
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information he obtained from plaintiff. That is far more than the disparaging description of "self-serving speculation" recited by defendants. Defendants' Motion at 3. Contrary to the characterization by defendants, Dr. Minnehan took great pains to document the figures he used and conclusions he reached. His narrative report, which is two pages in length, contains another two pages of detailed notes and discussion concerning the conclusions he reached. See Report of Robert F. Minnehan, Ph.D. (copy attached as Exhibit-1). Defendants state baldly that Dr. Minnehan based his figures and calculations on plaintiff's own assumptions. That is simply incorrect. In fact, the detailed notes establish that Dr. Minnehan critically considered a variety of well-accepted economic factors in his analysis. Dr. Minnehan obtained a base figure of $350,000.00 as an estimate by plaintiff of his expected commissions in 2005 had he not experienced the discriminatory conduct at the heart of this case. Dr. Minnehan reviewed this figure and reported that he used it "as it is compatible with 2003 and 2004 numbers." Dr. Minnehan also reviewed commissions figures for ten other Wachovia Financial Advisors. The commissions ranged from a high of $1,006,039 to a low of $229,402. Nine of the ten were between $537,914 and $229,402, and the average was $440,007. See Exhibit-2 (data and graph which were not included in final report). Mr. Mitchell's figure fell within the range and was actually below the average figure. Accordingly, the figure used by Dr. Minnehan is reasonable and justified by the data. Defendants may disagree, but that is a matter for cross-examination, not for deciding admissibility of the evidence. Defendants also point to comments made by Dr. Minnehan in the introduction of his report as somehow invalidating the economic analyses that come later. In his "background" section, Dr. Minnehan states that plaintiff's reassignment in December 2004 (from Prices Corner) resulted in a substantial decrease in plaintiff's financial production. Defendants refer to

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that statement as speculation, but it is fact. It cannot be disputed that plaintiff's financial production fell dramatically after December 2004 because Wachovia's own records document the precipitous decline. It is the cause of the decline that is at issue in this case (and for the jury to decide), but Dr. Minnehan is not offering any opinions as to whether discrimination actually occurred. Indeed, Dr. Minnehan's testimony is relevant only to damages, not liability. Defendants criticize Dr. Minnehan's comment that the closing of the Capitol Trail office in October 2006 "complicated" plaintiff's situation. Again, that is fact; Wachovia closed the Capitol Trail office in October 2006 and moved plaintiff to the Meadowood office where he had never before worked. Had plaintiff not been removed from Prices Corner in 2004, he would not have been subsequently transferred from Capitol Trail to Meadowood in 2006. Dr. Minnehan fully documented the other projections he made and reasons therefore. For instance, with respect to anticipated commissions growth, Dr. Minnehan noted that he used growth figures of 10% and 5% respectively for years 2006 and 2007 based on plaintiff's past performance and Wachovia's rate of growth per financial center as reported in Wachovia's own federal 10-K filing. Furthermore, Dr. Minnehan used 0% growth during 2008 due to prevailing economic conditions. Starting in 2009, Dr. Minnehan used 5% growth starting in 2009 based on his professional view that this was a "conservative figure." Future projections may provide fertile ground for cross-examination, but they are admissible at trial. Coleman v. Dydula, 139 F.Supp.2d 388, 395 (W.D.N.Y. 2001) (future economic testimony permitted; defendant's admissibility challenge "best left to cross-examination"). With respect to methodology, the figures were discounted to present value pursuant to standard economic practice. Defendants question why Dr. Minnehan calculated back pay and front pay figures at different interest rates. Dr. Minnehan followed Delaware law for calculating

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interest on past losses (5% above the Federal Discount Rate, 6 Del.C. §2301), and he applied a figure of 6% for future losses based on long-term investment rates. Defendants recite a number of other alleged problems with Dr. Minnehan's methodology, yet they cite no contrary authorities or figures. Defendants simply refer to the methodology as "highly questionable." That argument goes to the weight of the evidence, not the admissibility of the evidence. Coleman, 139 F.R.D. at 395 ("The fact that defendants believe [expert] has used the wrong method and the wrong conclusion does not render [expert's] testimony inherently unreliable. Again, these kinds of disagreements are best left to cross-examination."). As a fall-back position, if Dr. Minnehan is permitted to testify, defendants seek to have his report barred from evidence because "the subjective belief or unsupported speculation that permeates Dr. Minnehan's report will undoubtedly confuse rather than assist the trier of fact." Defendants' Motion at 4-5 (emphasis in original). That conclusory statement ignores both the detailed content of the report, and the fact that the report contains nothing that Dr. Minnehan cannot testify to on the witness stand. Full disclosure will avoid any potential confusion. Defendants' attempt to bar Dr. Minnehan from testifying is based on nothing more than unsupported adversarial disagreement. Plaintiff respectfully requests that the Court deny

defendants' motion in limine seeking to bar or limit the scope of Dr. Minnehan's testimony. BIGGS AND BATTAGLIA /s/ Steven F. Mones Steven F. Mones (Del. Bar #2611) 921 N. Orange Street P.O. Box 1489 Wilmington, DE 19899-1489 Tel: 302-655-9677 Fax: 302-655-7924 [email protected] Attorneys for Plaintiff Kenneth S. Mitchell

April 10, 2008

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