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Can Experts Testify As To The Effects Or State Of Mind Of Corporate Defendants?

In pharmaceutical litigation, plaintiffs routinely seek the admission of expert testimony as to what constitutes ethical or moral conduct for a pharmaceutical company as well as the motive, intent, and state of mind of company employees. These experts seek to opine that the pharmaceutical company endangered public safety by misrepresenting or not disclosing information. Or to allege that the pharmaceutical company did not perform scientific studies, or if it did conduct studies, that the company concealed or mischaracterized the studies’ results. These experts also purport to “know” that prescribing physicians and/or the public would have acted differently if the pharmaceutical company had been truthful. This type of corporate ethical conduct testimony is offered only to elicit an emotionally charged response and thereby prejudice the jury against the pharmaceutical company.

Courts trying drug and medical device cases have generally held corporate ethical conduct testimony inadmissible under Daubert v. Merrell Dow Pharms. Inc., 509 U.S. 579 (1993), its state counterpart, and other evidentiary rules, which require that experts be qualified and that their opinions be reliable, relevant, and the product of specialized knowledge based on sufficient facts and data. Such opinions, moreover, should be helpful to the trier of fact, proper subjects of expert opinions, and not unfairly prejudicial.

BASIS FOR CHALLENGING PLAINTIFFS’ EXPERT WITNESS ETHICAL CONDUCT TESTIMONY

Because of the speculative, irrelevant, and potentially prejudicial and confusing nature of these types of opinions, they are ripe for a preemptive Daubert challenge. Typically, the starting point for this analysis is Federal Rule of Evidence (FRE) 702 (or its state counterpart) and the standards set forth in Daubert. FRE §702 provides that “if scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue,” a witness who has been properly qualified as an expert may offer opinion testimony only if: “1) the testimony is based upon sufficient facts or data; 2) the testimony is the product of reliable principles and methods; and 3) the witness has applied the principles and methods reliably to the facts of the case.”1

Daubert states that trial court judges are responsible for ensuring expert testimony is based on reliable methodology and is applicable to the facts at issue. Daubert instructs federal judges to act as “gatekeepers” to avoid the presentation of subjective speculation.2 Indeed, various jurisdictions have excluded corporate conduct, motive, and intent evidence under FRE 702 and Daubert.3 This article will examine a number of the cases in which corporate conduct testimony was excluded.

EXPERT TESTIMONY AS TO THE ETHICS OF CORPORATE CONDUCT

In In re Rezulin Products Liability Litigation, the court concluded that plaintiffs’ experts’ opinions concerning the ethical obligations and conduct of pharmaceutical companies were inadmissible, finding that the opinions were: 1) unreliable under Rule 702 and Daubert because they were not based on knowledge but instead on personal views; 2) irrelevant under Rule 702 and Daubert; and 3) likely to unfairly prejudice the jury by introducing the “experts’ opinions and rhetoric concerning ethics as an alternative and improper grounds for decisions.”4

In In re Rezulin, plaintiffs’ clinical trial experts sought to opine that the companies failed to adequately disclose material facts about the drug to the FDA.5 One of the experts admitted at deposition that he was not an expert on ethics, but that he nevertheless held an opinion about the behavior of pharmaceutical companies.6 Another expert admitted that his opinion on ethics was a personal belief.7 The court excluded the clinical trial experts’ testimony, finding that the experts were “unqualified to testify about the facts of the disclosures to the FDA because they lack firsthand knowledge of the fact underlying their opinion.8 The court also found that experts’ ethics opinion testimony “based on their personal, subjective views” was also irrelevant because “[w]hile the [pharmaceutical company] may be liable in the court of public opinion, or before a divine authority for their ethical lapses, expert opinion as to the ethical character of their action simply is not relevant to these lawsuits.”9 In analyzing Rule 403,10 the court concluded that allowing expert witnesses to offer what amounted to personal opinions of corporate behavior would be confusing and unfairly prejudicial because the jury might base its decision on those ethical standards rather than the pertinent legal standard.11

As to plaintiffs’ regulatory expert, the court excluded his narrative testimony on the “history of Rezulin” and actions taken by the pharmaceutical company with respect to Rezulin.12 In looking at the sub­stance of the expert’s testimony, the court observed:

[The] history of Rezulin is merely a ‘narrative of the case which a juror is equally capable of constructing’ […] Such material, to the extent it is admissible, is properly presented through percipient witnesses and documentary evidence […. T]he glosses that [the witness] interpo­lates into his narrative are simple inferences drawn from uncomplicated facts that serve only to but­tress plaintiffs’ theory of the case. As plaintiffs’ Rezulin ‘historian,’ therefore, [the witness] does no more than counsel for plaintiff will do in argument, i.e., propound a particular interpretation of [the company’s] conduct.13

Thus, the court held the expert’s testimony regarding the “history of Rezulin” was inadmissible.14

In re Rezulin demonstrates that there are two types of conduct evidence that plaintiffs routinely seek to have admitted in pharmaceutical litigation: opinions about whether the pharmaceutical company acted ethically and opinions that provide some sort of narrative of facts, with expert commentary on selected regulatory and corporate documents.

Similarly, in In re Trasylol Products Liability Litigation, the Southern District of Florida excluded plaintiffs’ expert testimony regarding ethical conduct finding that the opinion was a reflection of the expert’s “own subjective beliefs and personal views and [did] not rest on knowledge as required by Rule 702.”15 Plaintiffs’ corporate conduct expert opined that the pharmaceutical company breached “ethical standards” for failing to respond to “safety signals” regarding the drug Trasylol.16 The expert’s deposition made clear that his opinion was not based on “scientific, technical, or other specialized knowledge.”17 The court looked at the substance of the expert’s testimony and found that he was offering an opinion about what the pharmaceutical company should have done to comply with drug safety principles.18 The expert conceded that he was not an expert in corporate ethics and testified, “The average lay person could have some opinions about corporate ethics.”19 He also acknowledged that his opinion was not based on FDA regulations or guidelines:

Just because I can’t name these guidelines doesn’t mean they don’t exist. I think that they probably do exist, but whether they exist or not, any reasonable person who saw a safety signal with a drug would want to pursue that to ensure the patient’s safety is ensured. It’s, you know, common sense. If you ask a man on the street about this they would say: Yes, I want to know whether this drug is harmful to me. And it’s the responsibility of the drug company to do that.20

Largely following the ruling of/in In re Rezulin, the court found the expert’s opinions on corporate ethics inadmissible because they were based only on his subjective beliefs rather than expert knowledge.21

The court also addressed the expert’s narrative of the regulatory documents.22 Most of the expert’s testimony, the court determined, “did not involve any regulatory analysis and instead consisted of conclusions made from a review of the regulatory history and [the pharmaceutical company’s] internal documents […] An instance [the court] found particularly egregious was [the expert’s] apparent effort to construct a factual scenario, entirely divorced from any regulatory expertise, to support the plaintiffs’ theory as to the [pharmaceutical company’s] knowledge.”23

The court concluded that plaintiffs’ expert was an advocate “presented with the trappings of an expert but with no expectation or intention of abiding by the opinion constraints of Rule 702. She comes armed with a Report designed to be broad enough to allow her to gather and stack inference upon inference in order to offer her ‘takeaway’ or ‘take home message’ with respect to intent, knowledge, or causation in a manner unrelated to regulatory expertise. Her testimony is unreliable and would not be of assistance to the jury.”24

The Eastern District of Arkansas was confronted with a similar situation in In re Prempro Products Liability Litigation.25 There, plaintiff put forth three corporate conduct experts to testify that the pharmaceutical companies violated various standards of care, including an alleged FDA “standard of reasonable care.”26 At a Daubert hearing, plaintiff’s counsel could not provide a defined standard of reasonable care in industry custom and practice once a drug has been approved by the FDA and placed on the market.27

In excluding the experts, the court stated, “Plaintiff’s counsel admitted the standard could be different in every circumstance — therein lies the rub — there is no set standard.”28 The court also added that the “witnesses’ proposed expert testimony is not expert in nature because plaintiff is unable to point to the existence of a reasonable standard of care or a custom and practice established by either industry or governmental standards […plaintiff’s experts] cannot be qualified as experts simply to testify what they believe [the companies] could have done versus what they should have done.”29 The court held that because plaintiff could not show some objective validation, plaintiff’s corporate conduct witnesses could not be permitted to testify as experts.30

EXPERTS AS “MIND READERS”

Many plaintiffs’ experts want to testify about what the pharmaceutical company knew, what its intentions were, and other matters that reflect corporate state of mind. Courts have held that “state of mind testimony” is improper because it describes lay matters which a jury is capable of understanding and deciding without an expert’s help.31 Courts, like the Southern District of New York in In re Fosamax Prods. Liability Litigation, have excluded testimony about a company’s knowledge, motives, or state of mind as speculative; beyond the scope of proper expert testimony; and inadmissible under FRE 702.32 In particular, the court in In re Fosamax held that plaintiff’s expert testimony as to corporate motives and state of mind was “conjecture […and] not a proper subject for expert or even lay testimony.33

In Jenkins v. Novartis, the most recent decision handling the subject of corporate state of mind testimony, plaintiffs proffered an expert to testify as to corporate conduct, about FDA standards, and whether the company failed to adequately disclose material facts to the FDA.34 Although the court acknowledged that plaintiffs’ regulatory expert was qualified in her field, it nevertheless found her unqualified to discuss corporate state of mind.35 The court observed that the expert’s discipline does not “provide her with a superior ability to judge [the pharmaceutical company’s] knowledge, and there is no basis for finding that the jury needs her assistance in evaluating [the company’s] knowledge.”36

SOLUTIONS

The case law above regarding corporate conduct demonstrates that issues of corporate ethics and other matters that reflect corporate state of mind are non-scientific and non-technical matters that are within the common understanding of jurors. Various jurisdictions have properly held that expert testimony on these issues is improper because few, if any, experts called in pharmaceutical litigation can qualify as experts on corporate intent and decision-making. Plaintiffs in pharmaceutical litigation will often seek to present expert testimony as to how defendant’s conduct was unethical and/or to speculate as to defendant’s state of mind or intent. Defense counsel should closely read an expert’s reports for any opinions regarding corporate intent and address such issues with the expert at deposition. A motion to exclude such testimony should be considered so that the jury hears only reliable and relevant expert testimony offered by qualified witnesses.


[1] Fed. R. Evid. § 702.

[2] See generally Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993).

[3] See In re Trasylol Prods. Liab. Litig. 2010 U.S. LEXIS 14222, * at 169 (S.D. Fla. Feb. 24, 2010); In re Fosamax Prods. Liab. Litig., 645 F.Supp.2d 164, 192 (S.D.N.Y. 2009); In re Rezulin Prods. Liab. Litig., 309 F.Supp.531, 543-47 (S.D.N.Y. 2004).

[4] In re Rezulin Prods. Liab. Litig., 309 F.Supp.2d 531, 543-47 (S.D.N.Y. 2004) (citations omitted).

[5] Id. at 547.

[6] Id. at 543, fn. 27.

[7] Id.

[8] Id. at 549.

[9] Id. at 544.

[10] Rule 403 of the Federal Rules of Evidence states, “Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.” Fed. R. Evid. § 403.

[11] In re Rezulin, 309 F.Supp.2d at 545 (acknowledging risk that legal standard of care and purported ethical standard will be “blurred”).

[12] Id. at 553.

[13] Id. at 551-52.

[14] Id.

[15] In re Trasylol Prods. Liab. Litig., 2010 U.S. LEXIS 142228, at *169 (S.D. Fla. Feb. 24, 2010)(citing In re Rezulin, 309 F.Supp.2d at 544).

[16] Id. at *160-*61.

[17] Id. at *170.

[18] Id. at *168.

[19] Id. at *170 (citation omitted).

[20] Id. at *171-*172.

[21] Id. at *173. “Despite Plaintiffs’ argument that the opin­ion at issue is not an ethical opinion because [the witness] does not use the word ‘ethical’ or ‘unethical’ in his Report […] this Court will consider [its] substance. […]. Much of the testimony in dispute relates to [defendant’s] responsibilities, the studies that [it] should have done to comply with drug safety principles, and the issues that [defendant] should have addressed earlier than it did. The Court finds that this proffered testimony is akin to the ethics testimony found to be inadmissible in Rezulin. […]. The Court finds this testimony inadmissible because it is a reflection of [the witness’] own subjective beliefs and personal views and does not rest on knowledge as required by Rule 702.” Id. at *168-*69. See also In re Baycol Prods. Liab. Litig., 532 F.Supp.2d 1029, 1053 (D. Minn. 2007) (“Personal views on corporate ethics and morality are not expert opinions”).

[22] In re Trasylol Prods. Liab. Litig., 709 F.Supp.2d 1323, 1329 (S.D. Fla. 2010).

[23] Id. at 1342.

[24] Id. at 1351.

[25] In re Prempro Prods. Liab. Litig., 2010 U.S. Dist. LEXIS 142558, at *5-*7 (E.D. Ark. Sept. 16, 2010).

[26] Id.

[27] Id.

[28] Id. at *8.

[29] Id. *5-*9.

[30] Id. at *9. Proposed expert testimony must be sup­ported by appropriate validation — i.e., good grounds, based on what is known. When a plaintiff cannot show some independent objective validation, courts generally exclude such unsupported speculation. See In re Baycol Prods. Liab. Litig., 532 F.Supp.2d 1029, 1053 (D. Minn. 2007) (“Personal views on corporate ethics and morality are not expert opinions”); In re Diet Drug Prods. Liab. Litig., 2001 U.S. Dist. LEXIS 1174, *31 (E.D. Pa. Feb. 1, 2001) (holding purported expert testimony about ethics is inadmissible because it is “inherently susceptible to subjective personal influence and lacking indicia of reliability”).

[31] In re Baycol, 532 F.Supp.2d at 1053-54 (excluding expert testimony that “speculates as to Bayer’s motives, intent, or state of mind, or speculates as to the motives of the FDA or what other drug companies would do” because “[p]ersonal views on corporate ethics and morality are not expert opinions”).

[32] In re Fosamax Prods. Liab. Litig., 645 F.Supp.2d 164, 192 (S.D.N.Y. 2009).

[33] Id.; See also Deutsch v. Novartis Pharms. Corp. 768 F.Supp.2d 420, 467 (E.D.N.Y. 2011) (noting that the witness “scatters improper personal opinions, speculation, and state of mind inferences throughout the narratives in her report. Such opinions are inadmissible insofar as ‘the opinions of [expert] witnesses on the intent, motives, or states of mind of corporations, regulatory agencies, and others have no basis in any relevant body of knowledge or expertise’”); In re Diet Drug, 2001 U.S. Dist. LEXIS at 31 (testimony that pharmaceutical company was driven by its desires to increase profits is inadmissible holding purported expert testimony about ethics is inadmissible).

[34] Jenkins v. Novartis Pharmas. Corp. 2012 U.S. Dist. LEXIS 176697, at *17 (E.D. Tenn. Dec. 13, 2012).

[35] Id.

[36] Id. at *17-*18.

Finis

Citations

  1. Fed. R. Evid. § 702. Jump back to footnote 1 in the text
  2. See generally Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993). Jump back to footnote 2 in the text
  3. See In re Trasylol Prods. Liab. Litig. 2010 U.S. LEXIS 14222, * at 169 (S.D. Fla. Feb. 24, 2010); In re Fosamax Prods. Liab. Litig., 645 F.Supp.2d 164, 192 (S.D.N.Y. 2009); In re Rezulin Prods. Liab. Litig., 309 F.Supp.531, 543-47 (S.D.N.Y. 2004). Jump back to footnote 3 in the text
  4. In re Rezulin Prods. Liab. Litig., 309 F.Supp.2d 531, 543-47 (S.D.N.Y. 2004) (citations omitted). Jump back to footnote 4 in the text
  5. Id. at 547. Jump back to footnote 5 in the text
  6. Id. at 543, fn. 27. Jump back to footnote 6 in the text
  7. Id. Jump back to footnote 7 in the text
  8. Id. at 549. Jump back to footnote 8 in the text
  9. Id. at 544. Jump back to footnote 9 in the text
  10. Rule 403 of the Federal Rules of Evidence states, “Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.” Fed. R. Evid. § 403. Jump back to footnote 10 in the text
  11. In re Rezulin, 309 F.Supp.2d at 545 (acknowledging risk that legal standard of care and purported ethical standard will be “blurred”). Jump back to footnote 11 in the text
  12. Id. at 553. Jump back to footnote 12 in the text
  13. Id. at 551-52. Jump back to footnote 13 in the text
  14. Id. Jump back to footnote 14 in the text
  15. In re Trasylol Prods. Liab. Litig., 2010 U.S. LEXIS 142228, at *169 (S.D. Fla. Feb. 24, 2010)(citing In re Rezulin, 309 F.Supp.2d at 544). Jump back to footnote 15 in the text
  16. Id. at *160-*61. Jump back to footnote 16 in the text
  17. Id. at *170. Jump back to footnote 17 in the text
  18. Id. at *168. Jump back to footnote 18 in the text
  19. Id. at *170 (citation omitted). Jump back to footnote 19 in the text
  20. Id. at *171-*172. Jump back to footnote 20 in the text
  21. Id. at *173. “Despite Plaintiffs’ argument that the opin­ion at issue is not an ethical opinion because [the witness] does not use the word ‘ethical’ or ‘unethical’ in his Report […] this Court will consider [its] substance. […]. Much of the testimony in dispute relates to [defendant’s] responsibilities, the studies that [it] should have done to comply with drug safety principles, and the issues that [defendant] should have addressed earlier than it did. The Court finds that this proffered testimony is akin to the ethics testimony found to be inadmissible in Rezulin. […]. The Court finds this testimony inadmissible because it is a reflection of [the witness’] own subjective beliefs and personal views and does not rest on knowledge as required by Rule 702.” Id. at *168-*69. See also In re Baycol Prods. Liab. Litig., 532 F.Supp.2d 1029, 1053 (D. Minn. 2007) (“Personal views on corporate ethics and morality are not expert opinions”). Jump back to footnote 21 in the text
  22. In re Trasylol Prods. Liab. Litig., 709 F.Supp.2d 1323, 1329 (S.D. Fla. 2010). Jump back to footnote 22 in the text
  23. Id. at 1342. Jump back to footnote 23 in the text
  24. Id. at 1351. Jump back to footnote 24 in the text
  25. In re Prempro Prods. Liab. Litig., 2010 U.S. Dist. LEXIS 142558, at *5-*7 (E.D. Ark. Sept. 16, 2010). Jump back to footnote 25 in the text
  26. Id. Jump back to footnote 26 in the text
  27. Id. Jump back to footnote 27 in the text
  28. Id. at *8. Jump back to footnote 28 in the text
  29. Id. *5-*9. Jump back to footnote 29 in the text
  30. Id. at *9. Proposed expert testimony must be sup­ported by appropriate validation — i.e., good grounds, based on what is known. When a plaintiff cannot show some independent objective validation, courts generally exclude such unsupported speculation. See In re Baycol Prods. Liab. Litig., 532 F.Supp.2d 1029, 1053 (D. Minn. 2007) (“Personal views on corporate ethics and morality are not expert opinions”); In re Diet Drug Prods. Liab. Litig., 2001 U.S. Dist. LEXIS 1174, *31 (E.D. Pa. Feb. 1, 2001) (holding purported expert testimony about ethics is inadmissible because it is “inherently susceptible to subjective personal influence and lacking indicia of reliability”). Jump back to footnote 30 in the text
  31. In re Baycol, 532 F.Supp.2d at 1053-54 (excluding expert testimony that “speculates as to Bayer’s motives, intent, or state of mind, or speculates as to the motives of the FDA or what other drug companies would do” because “[p]ersonal views on corporate ethics and morality are not expert opinions”). Jump back to footnote 31 in the text
  32. In re Fosamax Prods. Liab. Litig., 645 F.Supp.2d 164, 192 (S.D.N.Y. 2009). Jump back to footnote 32 in the text
  33. Id.; See also Deutsch v. Novartis Pharms. Corp. 768 F.Supp.2d 420, 467 (E.D.N.Y. 2011) (noting that the witness “scatters improper personal opinions, speculation, and state of mind inferences throughout the narratives in her report. Such opinions are inadmissible insofar as ‘the opinions of [expert] witnesses on the intent, motives, or states of mind of corporations, regulatory agencies, and others have no basis in any relevant body of knowledge or expertise’”); In re Diet Drug, 2001 U.S. Dist. LEXIS at 31 (testimony that pharmaceutical company was driven by its desires to increase profits is inadmissible holding purported expert testimony about ethics is inadmissible). Jump back to footnote 33 in the text
  34. Jenkins v. Novartis Pharmas. Corp. 2012 U.S. Dist. LEXIS 176697, at *17 (E.D. Tenn. Dec. 13, 2012). Jump back to footnote 34 in the text
  35. Id. Jump back to footnote 35 in the text
  36. Id. at *17-*18. Jump back to footnote 36 in the text