Post-Confirmation Comm. for Small Loans, Inc. v. Martin, 2016 U.S. Dist. LEXIS 44270 (March 31, 2016).
Observers of Daubert cases know that rulings on expert admissibility tend to be all over the map. The legal test requires the party offering the testimony to show the opinion is relevant, reliable, and helpful to the jury. But, in applying the criteria, courts have shown themselves to be surprisingly liberal or oddly strict “gatekeepers.”
In a complex bankruptcy case, the court recently followed the first route, ruling that Daubert can accommodate polar opposite views on determining solvency for multiple debtor entities. It was a matter for trial to reveal which expert opinion was more creditable in terms of resolving the substantive issues, the court decided.
The plaintiff, representing the debtor enterprises, sued executives of related family-run consumer lending and retail businesses that had filed for Chapter 11 bankruptcy over allegedly fraudulent transfers.
To prevail, the plaintiff needed to show the debtor entities were insolvent at the time of the transfers. Both sides engaged experienced experts who had a fundamental disagreement over how to assess solvency in this case. Both parties filed Daubert motions to exclude the rivaling expert.
In considering the motions, the court emphasized that Daubert was about the reliability of the expert’s testimony, not the persuasiveness of arguments, and reliability was a flexible concept.
Find an extended discussion of the case here.