Reprinted with permission.
IMS ExpertServices periodically sends me e-mails that highlight recent key court cases that
can significantly affect the effectiveness of expert testimony, both for the plaintiff and for
This article by attorney Joshua Fruchter, writing for
reports on a case where the defendant sought to declare a
corporation as a qualified 'expert' witness,
thereby hoping to draw on the collective authority of an entire pool of knowledge that would be, if permitted,
virtually unassailable. Since the plaintiff was an individual, surely his personal credentials could not approach
that of a pool of professionals at a public corporation employing maybe thousands. It would be like me challenging
the electrical engineering department staff at MIT about the precision of the value of a charge on an electron.
Interestingly, although the court in this instance ruled against a corporation being admitted as an expert witness
(with some very interesting criteria worth reading), there are examples where courts have ruled that "corporate
personhood" is a valid concept. That is a very troubling concern to people who claim the U.S. Declaration of
Independence explicitly declares "We the people...," not "We the corporation..." are protected by its contents.
Being aware of issues such as this case might be of use to you if you ever find yourself in a courtroom situation
where the opposing party attempts such shenanigans.
Joshua Fruchter, Esq. is the principal of eLawMarketing, a leading provider since 2002
of website development, email marketing, blogging, search engine optimization (SEO), and social
media services to law firms of all sizes. Joshua is a graduate of NYU School of Law, a member
of the New York Bar Association, and a former attorney at a large NYC firm. Joshua combines
his legal background and marketing technology expertise to help law firms generate leads and
business from Internet marketing. Joshua has published articles on legal marketing technologies
in numerous law-related periodicals, and has presented on legal marketing technologies before
various bar and legal marketing associations. Joshua is also the editor of LawyerCasting,
a blog covering "best practices" in online marketing for lawyers and law firms.
A Corporation as an Expert Witness?
March 21, 2015
The Delaware Chancery Court recently
addressed a novel question that bordered on the metaphysical (or, perhaps more appropriately, the absurd): May a
party designate a corporation to serve as an expert witness? The Court answered in the negative on the ground
that, under the rules of evidence, an expert witness must be a biological person, i.e., possess "a body and a
brain." Since a corporation has neither, it may not testify.
The issue arose in connection with a breach
of fiduciary duty case challenging the valuation at which Dole Food Company ("Dole") was taken private by its
controlling shareholder, David Murdock. See In re Dole Food Co, Inc. Stockholder Litigation, 2015 WL 832501
(Del. Chancery Ct. February 19, 2015). Defendants identified Stifel Nicolaus & Co., Inc. ("Stifel"), a
corporation, as their expert witness to testify concerning Dole's value at the time of the buyout.
Defendants' expert reports curiously identified Stifel as the author and were signed by employees of Stifel, but
not in their personal capacity. Instead, the employees signed as authorized representatives of Stifel. The fun
started when plaintiffs noticed a deposition of Stifel, one in which defendants presented Seth Ferguson
("Ferguson") as the biological person most knowledgeable about Stifel's reports. At one point during the
deposition, when Ferguson innocently claimed authorship of the reports, his own counsel objected, stating that "Stifel
is the expert," not Ferguson. Plaintiffs were baffled and sought guidance from the Court.
At this point,
we should pause and ponder the method to defendants' madness. Did they have a trick up their sleeve? What were
they trying to accomplish? According to plaintiffs, the strategy of designating a corporation as an expert
witness was to enable reliance on the collective knowledge and experience of all of the corporation's employees
and agents, in contrast to a human witness who can rely only on his or her own limited knowledge and experience.
In other words, defendants were attempting to create a "super" witness (like Mr. Incredible) bursting with
unlimited brilliance and wisdom far surpassing that of any single human mind. Presumably, any human expert
opposing this corporate witness would be left in the dust.
It's hard to believe defendants thought their
strategy would succeed, but fortunately for them, the Court seemed far more amused than annoyed and patiently
explained how the rules of evidence precluded reliance on a corporation as an expert. Acknowledging that the law
personifies corporations as independent entities in numerous contexts, the Court ruled that providing testimony
was not one of them. Among other things, the rules of evidence require witnesses to have a voice to take an oath
or make an affirmation, a memory that can be refreshed, and a sense of hearing. A corporation possesses none of
those qualities and thus cannot qualify as a witness. Moreover, as the court noted, since a corporation can act
only through its agents, it must rely on agents to testify on its behalf. However, witnesses must testify
personally since testifying through an agent would constitute hearsay. That is a hurdle a corporation cannot
Luckily for defendants, the Court exhibited mercy, and while soundly rejecting the designation
of Stifel as a witness, it permitted defendants to substitute Ferguson in Stifel's place. This was hardly a
hardship on plaintiffs since Ferguson had already signed Stifel's reports and testified on Stifel's behalf at
the deposition. Now Ferguson would simply be acting in his own capacity rather than on behalf of Stifel.
As can be seen from the cases cited by the Court in support of its ruling, this is not the first time the
question of a corporation serving as a witness has come up. While the day may yet come, no one advancing the
proposition of corporation as witness has yet prevailed in court.
above one possible advantage defendants might have gained had their gambit worked – reliance on the collective
wisdom of all of the corporation's employees.
Can you identify any other motivations for designating a
corporation as a witness?
Quite possibly, some attorney at one of the firms representing the defendants
felt his or her colleagues were taking their jobs too seriously and decided to inject a bit of theater into the
litigation, and everyone then played along, including the judge. For those who think jurists and lawyers don't
have a sense of humor, this decision offers evidence to the contrary.
This article was originally published in
a newsletter distributed by IMS ExpertServices™.
IMS Expert Services is the premier
expert witness search firm in the legal industry, focused exclusively on providing custom
expert witness searches to attorneys. To read this and other legal industry
publications, please visit IMS Expert Services' recent articles. For your next expert witness
search, call us at 877-838-8464 or visit our website.
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Posted April 20, 2015