California has long gone its merry, idiosyncratic way in the Daubert/Frye wars. The California Supreme Court has fashioned something called “Kelly/Leahy”after the names of the two most important opinions. However, in Sargon Enterprises, Inc. v. University of Southern California, ___ P.3d ___, 2012 WL 5897314 (Cal. Nov. 26, 2012), the court spoke about California expert admissibility with a distinct Daubert accent. Sargon(great name – it evokes space aliens, unknown elements, or even ancient Sumer) is a drug/medical device case only in the loosest sense. It’s about an alleged “breach of a contract for the [defendant] to clinically test a new implant the [plaintiff] had patented.” Id. at *1. The expert testimony at issue involved lost profits. Id. at *2. The testimony was vague and tautological, involving the expert’s supposition that the defendant, because it was“innovative,” would have joined the “big six” dental implant manufacturers. But he measured“innovation” according to “the proof is in the pudding” – successful companies were “innovative,” less successful ones less so. Why was the plaintiff company “innovative”even though it was small? That opinion was a bunch of gobbledygook and jargon amounting to “because I think so.” See Id. at *3-5. The trial court threw the expert out. The Court of Appeals reversed and found the testimony admissible, then the California Supreme Court granted review.
This blog doesn't care all that much about the ins and outs of calculating lost profits, but we do care about the standards for expert admissibility. Sargon is noteworthy for the court’s repeated reliance on the federal precedent that we have (usually) come to know and love, starting with “[u]nder California law, trial courts have a substantial 'gatekeeping' responsibility.” Sargon, 2012 WL 5897314, at *14 (footnote citing Joiner and Kuhmo Tire omitted). That leads to “[e]xclusion of expert opinions that rest on guess, surmise or conjecture is an inherent corollary to the foundational predicate for admission of the expert testimony.” Id.
We also read that the “court may conclude that there is simply too great an analytical gap between the data and the opinion proffered.” Id. at *15 (again citing Joiner). Daubertitself follows hard on the heels, with “the gatekeeper's focus must be solely on principles and methodology, not on the conclusions.” Id.at *16. Then we get a second helping of Kuhmo: “the gatekeeper's role is to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.” Id. And, just like federal law, review of expert exclusion decisions is “for abuse of discretion.” Id. The court ultimately held that the opinion was properly excluded and that the trial court had done all the right Daubert-type things like holding a hearing:
The trial court did not abuse its discretion in the sense of making a ruling that was irrational or arbitrary. It presided over a lengthy evidentiary hearing and provided a detailed ruling . . . . The trial court also excluded the expert testimony for proper reasons. It properly found the expert’s methodology was too speculative for the evidence to be admissible. . . . [The expert’s] reasoning was circular. He concluded that the Big Six were innovative because they were successful, and that the smaller companies (excluding [plaintiff]) were not innovative because they were less successful. In essence, he said that the smaller companies were smaller because they were not innovative. The trial court properly considered this circularity in the reasoning as a basis to exclude the testimony
Id. at *20.
There’s a large body of case-law under Daubertand by and large we like it. States going off on their own tangents are a source of uncertainty that the other side can exploit. Thus we commend California’s evident embrace of most things Daubert in the Sargon decision.