Amendment to Federal Rule of Evidence 701: The End of the Lay Expert or the End of the Attorney-Client Privilege for Testifying Parties?

March 14, 2001

Author: John M. Tanner

Prior to December 1, 2000, the rule governing lay witness opinion testimony allowed lay witnesses to offer expert opinions based on specialized knowledge so long as the other requirements of the rule were met. This practice allowed litigants to offer expert testimony through witnesses who may not be qualified as experts and who had not complied with expert disclosure requirements. Effective December 1, 2000, the rule was amended to exclude admissibility if the testimony would be within the scope of the rule governing expert witness testimony. The amendment was intended to preclude parties from circumventing the expert disclosure and discovery process, but it may have some more far-reaching effects.

The Background--Former Rule 701

Former Rule 701 limited lay witness testimony to "those opinions or inferences which are (a) rationally based on the perception of the witness and (b) helpful to a clear understanding of the witness' testimony or the determination of a fact in issue." In applying the rule, courts often permitted lay witnesses to express opinions grounded either in experience or specialized knowledge, so long as the other standards of Rule 701 were met. See Asplundh Mfg. Div. v. Benton Harbor Eng'g, 57 F.3d 1190, 1198 (3rd Cir. 1995) (holding that a lay witness with first-hand knowledge can offer an opinion akin to expert testimony in most cases, if the trial judge determines that the witness possesses sufficient and relevant specialized knowledge or experience to offer the opinion).

As stated by the Third Circuit in Asplundh, while some of these cases "might be described as modest departures from the core area of lay opinion testimony," there are other cases which "permit lay witnesses to express their opinions in areas in which it would ordinarily be expected that only an expert qualified under Rule 702 could give such testimony, such as whether a product design was defective or whether certain factors (e.g., a product defect) caused an accident." Id. at 1199 (citing Soden v. Freightliner Corp., 714 F.2d 498 (5th Cir. 1983), where lay witness permitted to opine that the design of a truck was dangerous and defective in a product liability action).

An important aspect of Rule 701 was that it often allowed a testifying party to give his or her views on the case, nearly without limit. This might be used in rebuttal where the defense had raised issues not obvious from the pleadings. It was also helpful in smaller cases, where the expense of an expert might not be justified.

The Change-New Rule 701

Rule 701 now provides that any part of a witness' testimony that is based on scientific, technical, or other specialized knowledge must comply with the standards of Rule 702 and the expert disclosure requirements. Specifically, a new subsection (c) was added which provides that for testimony to be admissible under rule 701, the testimony of a lay witness is limited to opinions or inferences "not based on scientific, technical, or other specialized knowledge within the scope of Rule 702." The effect of this change is that if testimony could qualify under 702, then it cannot qualify under 701. The focus of the amendment is on the subject matter of the testimony, rather than whether the witness is a layperson or an expert.

The Advisory Committee Note indicates that the amendment does not affect the type of testimony typically offered as lay opinion, such as "the appearance of persons or things, identity, the manner of conduct, competency of a person, degrees of light or darkness, sound, size, weight, distance, and an endless number of items that cannot be described factually in words apart from inferences." Fed. R. Evid. 701 advisory committee's note (citing Asplundh, 57 F.3d at 1196).

The Committee Note further states that the amendment incorporates the distinctions set forth in State v. Brown, 836 S.W.2d 530, 549 (Tenn. 1992). In Brown, the Tennessee Supreme Court stated that "the distinction between an expert and a non-expert witness is that a non-expert witness' testimony results from the process of reasoning familiar in everyday life and an expert's testimony results from a process of reasoning which can be mastered only by specialists in the field." Id. at 549. Applying this distinction, the court concluded that a nurse could testify as a lay person that an injury looked like a cigarette burn, but a paramedic could not give a lay opinion as to the source of bruises because that required specialized knowledge. Id. at 550. As stated in the Committee Note, "this is the kind of distinction made by the amendment to this Rule." Fed. R. Evid. 701 advisory committee's notes. (1)

What All the Fuss is About-Expert Witness Disclosure Requirements

Under the disclosure rules relating to expert witnesses, a party must disclose the identity of any person who may present evidence at trial under Rules of Evidence 702, 703, or 705. Fed. R. Civ. P. 26(a)(2)(A). Unless otherwise agreed to or directed by the court, the party must also provide a written report prepared and signed by each witness "retained or specially employed to provide expert testimony in the case or whose duties as an employee of the party regularly involve giving expert testimony." Fed. R. Civ. P. 26(a)(2)(B). The expert report must include:

a complete statement of all opinions to be expressed and the basis and reasons therefor; the data or other information considered by the witness in forming the opinions; any exhibits to be used as a summary of or support for the opinions; the qualifications of the witness, including a list of all publications authored by the witness within the preceding ten years; the compensation to be paid for the study and testimony; and a listing of any other cases in which the witness has testified as an expert at trial or by deposition within the preceding four years.

    Fed. R. Civ. P. 26(a)(2)(B).

    Disclosure of a lay witness (even one who would offer testimony under Rule 701), however, requires only the identification of the witness' names, address, phone number, and the type of information the witness is likely to have. Fed. R. Civ. P. 26(a)(1)(A). Under the amendment, a witness that is offering any testimony based on scientific, technical or specialized knowledge must now comply with the more extensive and detailed disclosure rules relating to experts, and may not avoid these requirements by calling the expert in the guise of a layperson.

    The differing disclosure burdens, in the eyes of the Advisory Committee at least, motivated parties to couch expert testimony under Rule 702 as lay opinion testimony under Rule 701. This, the Advisory Committee felt, gave the party both an economic incentive and a desire to ambush the other side at trial with undisclosed expert testimony. The new requirement that for testimony to be admissible under Rule 701 it must not be suitable under Rule 702 was designed to require disclosure and avoid surprise at trial.

    Unintended Consequences-Possible Effects of the Amendment

    The obvious repercussion of the amendment is that any witness who conveys scientific, technical, or other specialized knowledge must be designated as an expert and must comply with the expert disclosure requirements set forth in Fed. R. Civ. P. 26(a)(2). The expert must also meet the new reliability requirements of Rule 702, which was amended on December 1, 2000 to codify Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993).(2)

    A less obvious repercussion arises in a situation where it is the party himself or herself that offers an opinion that is based on specialized knowledge. Under the amended rule, the party apparently must be designated as an expert witness and must provide an expert report containing the information discussed above. In addition, under case law, a testifying expert must provide all materials he or she possesses in relation to the case in which he or she is testifying, including information concerning the events giving rise to the litigation and the opinions to be received in evidence. In re Air Crash Disaster at Stapleton Int'l Airport, Denver, Colorado, 720 F. Supp. 1442, 1444-45 (D.Colo. 1988). So what production is required when the party himself or herself will offer opinion testimony? Does the testifying party have to turn over documents which otherwise would be protected by the attorney-client privilege?

    Consider a hypothetical case where a small software company goes out of business because its competitor wrongfully and publicly accuses it of stealing the competitor's software code. In an action against the competitor, the software company needs opinion testimony of two types: (1) a software code expert to testify that he has compared the codes and there is no duplication between them; and (2) a damages expert to testify as to the damages sustained by the plaintiff. Although the defunct company cannot afford to retain either a code expert or a damages expert, the CIO knows code inside and out and the CFO of the company is an economist. Both could qualify as experts and can provide the necessary testimony.

    Under former Rule 701, the principals could testify and the company could prove its case in a cost-effective manner.(3) Under amended Rule 701, however, in order to provide the testimony the principals must be designated as expert witnesses and must disclose materials that include communications between them and their attorneys. Thus, the principals must choose between retaining other experts, which they cannot afford, or potentially waiving their attorney-client privilege, which may cost them more in the long run.

    In re Air Crash Disaster only analyzed waiver of the work-product privilege because the expert was a typical outside expert, and thus the attorney-client privilege was not implicated. Its reasoning, however, was that in order to allow proper cross-examination of the expert, the expert must disclose everything he or she reviewed in connection with the case. There is nothing on the face of the opinion that suggests the Court would not view endorsement of a party as an expert as a waiver of the attorney-client privilege and require the same disclosure, i.e., everything the party/witness has seen in connection with the case.(4)

    Conclusion

    The amendment to Rule 701 has the laudable purpose of preventing unfair surprise at trial. The amendment may go too far, however, and place a party with the cruel dilemma of producing no evidence on a particular subject or waiving its attorney-client privilege. The dilemma arises out of the conflicting policies behind full disclosure of all materials in the expert's possession and the protection of attorney-client communications.

    Endnotes

    1. From this and other comments in the notes, it appears that the Advisory Committee was much more concerned with the application of the Rules of Evidence in criminal cases than in business cases.

    2. As amended, Rule 702 now provides:

    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 qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise, 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.

      3. The brake on such an approach is that this testimony might be considered biased, as the witnesses effectively have a stake in the outcome of the case. Such concerns go to weight, however, and not to admissibility.

      4. Obviously, the company would argue that any such waiver is extremely narrow. The attorney-client privilege is a fragile thing, though, and waiver of any part of it may be the camel's nose in the tent. Unlike the work-product privilege, which is waived on a document by document basis, the attorney-client privilege is waived for the entire subject matter of the communication. Opposing counsel would certainly argue that "subject matter" is the case as a whole.


      This Article is published for general information, not to provide specific legal advice. The application of any matter discussed in this article to anyone's particular situation requires knowledge and analysis of the specific facts involved.

      Copyright © 2001 Fairfield and Woods, P.C., ALL RIGHTS RESERVED.

      Comments or inquiries may be directed to:
      John M. Tanner