The Expert's Examiner


Prassas Capital, LLC v. Blue Sphere Corp., No. 3:17-cv-131 (W.D. N.C., 7/3/19).
October 3, 2019

Court should exclude testimony of expert witnesses who are going to testify on issues the court already resolved as a matter of law and any other evidence that fails to focus on the core issues of the case and is therefore more likely to confuse the jury, complicate the issues and unduly delay the trial than to offer probative evidence.

The Plaintiff was hired to assist the Defendant in obtaining financing for its business. According to the Plaintiff, it helped to obtain financing, but was not paid under the contract. This is the second significant order in the case. The first order from the Court addressed the Defendant’s argument that the contract was void as a matter of law, because the services the Plaintiff was obligated to provide under the contract required the Plaintiff to be registered as a Broker/Dealer under the Securities & Exchange Act of 1934 (“SEA”). The Court previously ruled that contracts that violate the SEA are “voidable,” not void, and that the Defendant had not voided the contract. As a result, the Court has already denied that defense.

Before the Court in this second Order stands a group of trial motions seeking to exclude certain evidence and testimony from the upcoming trial. First, the Court makes it clear that it will exclude “all evidence” related to the defense that the Plaintiff violated the SEA for not being registered as a Broker/Dealer under the “law-of-the case” doctrine. The Defendant argued that it should be able to continue with the failure to register argument because, even if the contract itself was not void, Defendant could still assert that the performance of the contract was “illegal” and Defendant could not be obligated to compensate Plaintiff for performing an illegal act. The Court denies that argument, saying the Defendant should not be allowed to “resurrect” a defense “the Court has found inapplicable by relabeling it as an ‘illegality’ defense.”

The Court then applies the above rule to a series of evidentiary issues the parties had sought a ruling on for the upcoming trial. Chief among them, Plaintiff seeks to exclude Defendant’s expert's testimony as that testimony relates to the issue of whether Plaintiff was required to register as a Broker/Dealer. Defendants argue their expert could also testify on other issues related to industry requirements “that bear upon how the contract was (or was not) performed” adequately. The Court acknowledges that, under Daubert and Rule 702(a) of the Federal Rules of Evidence (“FRE”), the Defendant’s expert is qualified to testify on the issues Defendant now raises and that the “testimony could be somewhat helpful to the jury ….”

Ultimately, though, it decides to exclude the testimony under Rules 401-403 of the FRE, as it determines that the proposed testimony’s probative value is “substantially outweighed” by the danger of the confusion and delay it would cause the jury over the registration issue.

Moreover, the Court questions whether, even if probative, the expert’s testimony could be allowed; the expert was hired prior to the Court’s ruling that excluded the Broker/Dealer registration defense and, as a result, the expert’s written report focused exclusively on the registration issue. Under Rule 37(c)(1) of the FRCP, the Court said the testimony would need to be excluded as it is “well-established that ‘expert testimony exceeding the bounds of the expert’s report is excludable….’”

(This decision synopsis was taken from a piece written by Houston attorney Samuel B. Edwards, who contributed a summary to SOLA as a guest author.) (SOLA Ref. No. 2019-34-05)
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