Of Dairy and Daubert: Judge Must Mull Over Milk Markets

By Ryan Thompson, Esq

When asked why he chose to join the legal profession in the first place, the old attorney stated simply, “It was either become a lawyer or a doctor … and I hated science class.”

It was an accurate statement, in a multitude of ways. Not only is it truthfully the reason why many of the world’s barristers are practicing law to this day, as well as an honest answer often given by law students around America, but it was sensible thinking too: Lawyers and judges don’t need to know science…

Do they?

Today, that answer isn’t so simple anymore. When dealing with expert witnesses, the answer is complicated, confusing, muddled and mixed. The answer is “yes,” but simultaneously “no.”

Since Daubert, to what extent a court must scrutinize the scientific credibility, reliability and relevance of an expert witness and his or her testimony is still somewhat of a mystery. How far will each judge venture into the murky realm of science, chemistry, advanced economics or mathematics? We just do not know.

And so we watch … we watch each case and each court. Today, we look at milk.

In a recent class-action filed by dairy farmers in the U.S. District Court of Vermont, Chief Judge Christina Reiss would not shy away from scrutinizing advanced economics and milk market analysis.

Specifically, Judge Reiss was asked by both the plaintiffs and the defendants to exclude testimony from the opposing parties’ expert witnesses based on what each moving party claimed was erroneous methodology and incorrect conclusions related to the dairy industry.

And one can only imagine what Judge Reiss – a 51-year-old former litigator who grew up in New England – must think about all of this. Was she one of those law students decades ago who hated science class? Could she possibly imagine, as she sat at the breakfast as a child, pouring milk over her cereal and dreaming of one day becoming a federal judge, that she’d be studying milk markets and dairy industry data with a gavel in her hand?

Since Daubert and its progeny, it’s a new world for expert witnesses and those who use them, and an ever-changing world at that. This is especially true as state courts continue to adopt this federal standard. Florida adopted the Daubert standard last summer. And just weeks ago, a North Carolina appellate court finally confirmed that the Tar Heel State would, in fact, adhere to the Daubert standard with regard to expert witnesses.

The antitrust class-action of Allen et al v. Dairy Farmers of America has far-reaching geographic effect, as the court certified a class containing all dairy farmers who produced Grade A milk in 11 Northeastern states, spanning from New Hampshire down to Virginia, including the District of Columbia. However, what exact geographic area should be considered in determining whether or not defendants formed a monopoly to depress dairy prices and allocate the market is in dispute.

Defendants’ expert, Harvard University Professor Joseph Kalt, rebutted the testimony of plaintiffs’ expert, University of California at Berkeley Professor Gordon Rausser, claiming that plaintiffs’ proposed relevant geographic area was too narrow, and thus, defendants argued that Dr. Rausser’s testimony should be excluded. Vice versa, plaintiffs’ expert testified to the exact opposite, and plaintiffs moved to exclude the testimony of Dr. Kalt.

In separate written opinions and orders dated in late January, Judge Reiss addressed both parties’ Daubert motions. Early in the court’s analysis, the judge made deliberate mention of the now-notorious precedent that establishes the court’s role as gatekeeper:

The district court “functions as the gatekeeper for expert testimony”… and is charged with “the task of ensuring that an expert’s testimony both rests on a reliable foundation and is relevant to the task at hand. Pertinent evidence based on scientifically valid principles will satisfy those demands.” Daubert, 509 U.S. at 597.

In so performing its role as that gatekeeper, the Vermont court scrutinized each experts’ reliability and relevance, and addressed both parties’ specific Daubert challenges one by one. At times, the chief judge reacted sternly to what she seemed to think were frivolous attacks against the experts.

Deciding plaintiffs’ Daubert motion, which the court denied in part and granted in part, Judge Reiss took issue with some of the assertions being made: “Because each of Plaintiffs’ challenges is based upon an inaccurate characterization of Dr. Kalt’s opinions, the court addresses them in a summary matter.”

To make such an assertion, however, Judge Reiss could not remain completely on the sidelines and passively watch the milk experts battle it out. She had to comprehend the subject matter to some substantial degree in order to make her ruling.

And in so doing, Judge Reiss perhaps lends credence to former U.S. Supreme Court Chief Judge William Rehnquist’s well-known fear that the Daubert standard for the admissibility of experts would force judges to become “amateur scientists.”

Here, Judge Reiss had to systematically tackle each complex economic issue that the experts were challenged on: the univariate analysis of milk premiums, alleged economic motivations of non-party dairy processors, the accuracy of U.S. Department of Agriculture survey price reports, small but significant non-transitory increase in price (SSNIP) tests, and the economics behind cooperative governance.

Both plaintiffs’ and defendants’ motions were granted in part and denied in part with respect to the above challenges. However, more important than how the court ruled on each portion of the motions is the fact that the court was hesitant to disallow expert testimony simply based on the contention that the data was incorrect.

Fortunately in Allen v. Dairy Farmers, Judge Reiss knew when and where to pull back and stop herself from dissecting the dairy experts too deeply. As it is often seen with respect to the courts’ decisions on the admissibility of expert witness testimony, the court here found that factual disputes over the conclusions of experts are matters best left to the jury.

Finally, to the extent that Plaintiffs disagree with Dr. Kalt’s opinions regarding the potential breadth and composition of the relevant geographical market and claim they fail to account for commercial realities, Plaintiffs may challenge those opinions at trial through vigorous cross-examination.

Any disputed data, so long as it was characterized accurately, attributed correctly and was accompanied by whatever necessary stipulations, would not be withheld from the jury.

“Experts may rely on a wide range of information in forming their opinions provided it is the kind of information upon which ‘the experts in the particular field would reasonably rely,’” Hon. Reiss wrote, quoting the Federal Rules of Evidence.

And so the court is at least able to maintain some distance from being forced to conduct the type of precise economic analysis that judges are understandably unqualified for.

But still, that doesn’t mean that Judge Reiss, after this extensive inquiry into dairy affairs, will ever look at a glass of milk the same again.

Now it’s your turn.  Is it sensible for us to expect judges to accurately assess the “reliability” and “relevance” of expert witnesses? Does the Daubert standard force judges to become, as Hon. William Rehnquist once wrote in his dissent, “amateur scientists?”

Ryan Thompson, Esq

Ryan Thompson, Esq

Ryan’s experience in the legal industry coupled with his work in journalism brings a unique voice to his exclusive BullsEye articles. He is an assistant general counsel and writing professor at Niagara University. He has a degree in journalism from the University of Colorado and a law degree from Brooklyn Law School. Admitted to the New York bar in 2005, he previously worked at a Fifth Avenue law firm where he specialized in in-court litigation. Lured back to the dying newspaper industry in 2007, Thompson worked as legal editor of the historic Brooklyn Daily Eagle, where he remained for nearly five years. In 2012, Thompson returned to his hometown of Buffalo and lives there now.

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