Trial court leans on peer review service for Daubert determination

T.L. Wallace Const. v. McArthur, 2017 Miss. LEXIS 271 (June 29, 2017)

A Mississippi accounting malpractice case piqued our interest because the trial court enlisted the help of a peer review service to evaluate the admissibility of the parties’ proposed expert testimony. The Daubert hearing assumed a new dimension. It was no longer simply a battle between the opposing experts but presented an occasion for third-party experts to review and judge the work of the parties’ experts.

Whether the use of these outside services will become more common in the litigation setting remains to be seen.

The case arose when the former owner of a construction company sued the company’s outside accountant, alleging the latter had failed to alert him to the misappropriation of corporate funds. The accountant's negligence caused the company's eventual decline and caused the owner to lose everything.

The plaintiff presented expert testimony on three critical issues: the auditing standard of care, causation, and damages. The defendant offered damages testimony. To determine whether the expert testimony was admissible under Daubert, the trial court used JuriLytics, a California-based academic peer review service. It concluded the plaintiff’s causation opinion failed to establish the necessary link between the auditor’s actions or lack of action and the company’s eventual demise. Without expert testimony on causation, the plaintiff’s claim was dead, the trial court ruled, and granted the defendant’s summary judgment motion.

The plaintiff appealed to the state Supreme Court, arguing the law did not require expert testimony in all malpractice cases and that the plaintiff was able to show causation by way of lay testimony.