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analyzing the known or potential rate of error rate of the techniques and methods used
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No. 4:20-cv-00058-RGE-SBJ
2021-06-02
Peter P. MOE, Plaintiff, v. GRINNELL COLLEGE, Defendant.
David Harris Goldman, Babich Goldman, P.C., Amy Kathryn Davis, Miller Zimmerman & Evans PLC, Des Moines, IA, Andrew T. Miltenberg, Pro Hac Vice, Kara Gorycki, Pro Hac Vice, Stuart Bernstein, Pro Hac Vice, Nesenoff & Miltenberg, LLP, New York, NY, for Plaintiff. Frank B. Harty, Nyemaster Goode PC, Des Moines, IA, Frances M. Haas, Nyemaster Goode PC, Cedar Rapids, IA, for Defendant.
David Harris Goldman, Babich Goldman, P.C., Amy Kathryn Davis, Miller Zimmerman & Evans PLC, Des Moines, IA, Andrew T. Miltenberg, Pro Hac Vice, Kara Gorycki, Pro Hac Vice, Stuart Bernstein, Pro Hac Vice, Nesenoff & Miltenberg, LLP, New York, NY, for Plaintiff.
Frank B. Harty, Nyemaster Goode PC, Des Moines, IA, Frances M. Haas, Nyemaster Goode PC, Cedar Rapids, IA, for Defendant.
ORDER GRANTING DEFENDANT'S MOTION TO STRIKE EXPERT TESTIMONY
Rebecca Goodgame Ebinger, United States District Judge
I. INTRODUCTION
Plaintiff Peter P. Moe sues Defendant Grinnell College following his expulsion for violating the college's sexual misconduct policy. Moe offers Stan V. Smith's expert forensic economic report and testimony that calculates Moe's lost earnings and hedonic damages. Grinnell College moves to strike the portion of Smith's expert report and related testimony concerning hedonic damages. Grinnell College argues this evidence is unreliable and thus inadmissible under Federal Rule of Evidence 702. Grinnell College further argues this evidence is excludable under Rule 403 because it will mislead the jury. Moe argues Smith's entire expert report and anticipated testimony should be admitted.
The Court finds the portion of Smith's expert report and related testimony concerning hedonic damages is inadmissible under Rule 702 and excludable under Rule 403. The Court grants Grinnell College's motion to strike expert testimony.
II. BACKGROUND
The Court finds the following facts by preponderance of the evidence. See Daubert v. Merrell Dow Pharms., Inc. , 509 U.S. 579, 592 n.10, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) ; accord Polski v. Quigley Corp. , 538 F.3d 836, 841 (8th Cir. 2008).
Moe filed a complaint against Grinnell College in this Court alleging four counts. Compl., ECF No. 1. Moe alleges Grinnell College violated Title IX of the Education Amendments of 1972 (Count I). Id. ¶¶ 206–39. He also alleges three state law claims for: breach of contract (Count II); breach of implied covenant of good faith and fair dealing (Count III); and wrongful discipline (Count IV). Id. ¶¶ 240–58. Moe seeks damages and equitable relief. Id. at 77–78.
Moe designated Stan V. Smith as an expert witness to testify, in part, as to Moe's loss of value of life—or hedonic damages—as a result of Grinnell College's conduct. See Def.’s Ex. A Supp. Mot. Strike Expert Test., ECF No. 34-2 (Moe's expert disclosure); Def.’s Ex. B Supp. Mot. Strike Expert Test., ECF No. 34-3 (Smith's curriculum vitae). Smith has a Master of Business degree with a concentration in economics and a Doctor of Philosophy degree in economics, both from the University of Chicago. ECF No. 34-3 at 2. Additionally, Smith has worked as an economic consultant for banks and private firms, as an adjunct professor at DePaul University College of Law, and as a staff economist at the Federal Reserve System. Id. at 1. Currently, Smith is the president of Smith Economics Group, Limited, a consulting firm specializing in economics and finance. Id.
Smith produced an expert report calculating the damages Moe suffered from Grinnell College's Title IX proceedings and his expulsion. See Def.’s Ex. C Supp. Mot. Strike Expert Test., ECF No. 37 (Smith's expert report). The report includes two damages analyses. The first analysis calculates Moe's damages for lost wages and employee benefits. Id. at 3–5. The second analysis calculates Moe's hedonic damages. Id. at 6–8. Grinnell College does not contest the portion of Smith's expert report as to lost wages and benefits. See Def.’s Mot. Strike Expert Test. ¶¶ 6–8, 15, ECF No. 34.
Smith's method to calculate hedonic damages uses a formula "based on [three] factors." ECF No. 37 at 7; see ECF No. 37 at 45–54. First, he calculates the value of a statistical life by conducting a meta-analysis of "willingness-to-pay" studies. See id. at 6–7, 10, 13–15. Willingness-to-pay studies consider what "contemporary society ... actually pay[s] to preserve the ability to lead a normal life." Id. at 6; see also Pl.’s Br. Supp. Resist. Def.’s Mot. Strike Expert Test. 3, ECF No. 46-3. Smith's calculation of the value of a statistical life is based on three types of studies: 1) consumer behavior and purchases of safety devices; 2) wage risk premiums to workers; and 3) cost-benefit analyses of regulations. ECF No. 37 at 6–7, 13–15. Smith relies heavily on studies in the second category—labor market studies. Id. at 14–15. Smith calculates a "conservative[ ] estimate" of $5 million as the value of a statistical life. Id. at 7.
Second, Smith endeavors to calculate the percent reduction in the value of life Moe has suffered. Id. To arrive at Moe's reduction in the value of his life, Smith interviewed Moe to determine Moe's "diminished capacity to lead a normal life." Id. Diminished capacity is defined as "the impact on career, social and leisure activities, the activities of daily living, and the internal emotional state." Id. ; see also Pl.’s Ex. 9 Supp. Resist. Def.’s Mot. Strike Expert Test. 5–6, ECF No. 48-4 (Smith's work notes). According to Smith, informational interviews are "standard forensic economic practice." ECF No. 37 at 7 (citing Gerald Martin, Determining Economic Damages § 611 (2012)). In the interview, Moe self-reported a 70% to 80% reduction in his ability to lead a normal life in 2018—the time period Grinnell College conducted its Title IX investigation. See ECF No. 37 at 7; ECF No. 48-4 at 7. He also self-reported a 30% to 40% reduction in the ability to lead a normal life "from 2019 through an assumed trial or resolution date of October 1, 2021." ECF No. 37 at 7; see also ECF No. 48-4 at 5.
Third, Smith assumes a life expectancy of 77.4 years for Moe. ECF No. 37 at 7. Using these three "factors," Smith estimates the value of a statistical life per year of Moe's remaining life expectancy. See id. at 7, 46–47. He then reduces that estimate by Moe's self-reported percent reduction in the value of his life. See id.
As a result of the expulsion and pending case, Smith estimates Moe's hedonic damages are between $744,857 to $1,078,874. Id. at 8.
Now before the Court is Grinnell College's Motion to Strike Expert Testimony. ECF No. 34. Grinnell College moves to exclude the portion of Smith's expert report and related testimony concerning hedonic damages. Id. ¶¶ 6–8, 15. Moe resists Grinnell College's motion. Pl.’s Resist. Def.’s Mot. Strike Expert Test., ECF No. 46. Finding the parties’ briefing and exhibits adequately present the issues, the Court decides the motion without oral argument. See LR 7(c); Fed. R. Civ. P. 78(b).
Additional factual findings are set forth below as necessary.
III. LEGAL STANDARD
The Court applies the test from Daubert v. Merrell Dow Pharmaceuticals, Inc. to determine the admissibility of expert testimony under Rule 702. 509 U.S. at 592–93, 113 S.Ct. 2786 ; see also Kumho Tire Co., Ltd. v. Carmichael , 526 U.S. 137, 149, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999) (holding Daubert analysis applies to expert testimony based on "technical" or "specialized knowledge"). Federal Rule of Evidence 702 states:
A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:
(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.
Fed. R. Evid. 702. Under Daubert , the district court conducts a "preliminary assessment of whether the reasoning or methodology underlying the [expert] testimony is scientifically valid and ... properly can be applied to the facts in issue." 509 U.S. at 592–93, 113 S.Ct. 2786. "The exclusion of an expert's opinion is proper only if it is so fundamentally unsupported that it can offer no assistance to the jury." Wood v. Minn. Mining & Mfg. Co. , 112 F.3d 306, 309 (8th Cir. 1997) (internal quotation marks and citation omitted).
In addition to conducting a Daubert assessment, a court assessing expert testimony "should also be mindful of other applicable rules." Daubert , 509 U.S. at 595, 113 S.Ct. 2786. "Expert evidence can be both powerful and quite misleading because of the difficulty in evaluating it." Id. (internal quotation marks and citation omitted). Consequently, the court should also consider expert testimony in light of Federal Rule of Evidence 403. See id. Rule 403 permits the exclusion of evidence where the probative value "is substantially outweighed by a danger of ... confusing the issues ... [or] misleading the jury." Fed. R. Evid. 403.
IV. DISCUSSION
Grinnell College argues Smith's hedonic damages expert report and related testimony are inadmissible under Federal Rule of Evidence 702 because Smith's method for calculating hedonic damages cannot be tested, has a high error rate, and is not generally accepted by economists. Def.’s Br. Supp. Mot. Strike Expert Test. 5–9, ECF No. 34-1. Grinnell College also argues Smith's hedonic damages expert report and related testimony are excludable under Federal Rule of Evidence 403 because the probative value of the report and anticipated testimony is outweighed by the risk of confusing the jury. Id. at 9–10.
Moe contends Smith's expert report and anticipated testimony are admissible under Rule 702. ECF No. 46 ¶¶ 3–6, 8. Moe contends Smith's method for calculating hedonic damages can be verified and economists generally accept it. ECF No. 46-37 at 11–12, 17–18. Moe also contends Grinnell College offers no evidence demonstrating Smith's method for calculating hedonic damages has a high error rate. Id. at 14–15. Additionally, Moe argues Smith's entire expert report and anticipated testimony are admissible under Rule 403 because such evidence will not confuse the jury. Id. at 18–19.
The Court first assesses the admissibility of the evidence under Rule 702. The Court then considers whether the evidence is excludable under Rule 403. The Court finds the portion of Smith's expert report and related testimony calculating hedonic damages is inadmissible under Rule 702 because it is not relevant or reliable. Though this finding alone warrants striking the evidence at issue, the Court also balances the probative value of the challenged portion of Smith's expert report and related testimony against the potential for confusion of the issues or misleading the jury under Rule 403. The Court finds any limited probative value Smith's hedonic damages evidence provides is substantially outweighed by the threat of misleading the jury. The Court excludes the portion of Smith's expert report calculating hedonic damages and any related testimony. Because the contested portions of Smith's testimony and expert report are inadmissible under Rule 702 and excludable under Rule 403, the Court grants Grinnell College's motion to strike.
A. Rule 702
Expert testimony must meet three requirements to be admissible. Lauzon v. Senco Prods., Inc. , 270 F.3d 681, 686 (8th Cir. 2001). "First, evidence based on scientific, technical, or other specialized knowledge must be useful to the finder of fact in deciding the ultimate issue of fact. This is the basic rule of relevancy." Id. "Evidence is relevant if: (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action." Fed. R. Evid. 401. "Second, the proposed witness must be qualified to assist the finder of fact." Lauzon , 270 F.3d at 686. "A witness may be qualified as an expert based upon his knowledge, skill, experience, training or education." Moran v. Ford Motor Co. , 476 F.2d 289, 291 (8th Cir. 1973). "The test is whether the ... [expert's] education and experience demonstrate a knowledge of the subject matter." Hill v. Gonzalez , 454 F.2d 1201, 1203 (8th Cir. 1972). "Third, the proposed evidence must be reliable or trustworthy in an evidentiary sense, so that, if the finder of fact accepts it as true, it provides the assistance the finder of fact requires." Lauzon , 270 F.3d at 686 (internal quotation marks and citation omitted). "[T]he district court must exclude expert testimony if it is so fundamentally unreliable that it does not assist the jury." Weitz Co. v. MH Wash. , 631 F.3d 510, 527 (8th Cir. 2011). "Proposed testimony must be supported by appropriate validation—i.e. , ‘good grounds,’ based on what is known." Daubert , 509 U.S. at 590, 113 S.Ct. 2786. The emphasis of the reliability assessment is whether the principles that underlie a proposed submission are scientifically valid. Id. at 594–95, 113 S.Ct. 2786.
The Eighth Circuit has not considered the admissibility of expert testimony calculating hedonic damages. But several district courts in the Eighth Circuit have excluded Smith's testimony concerning hedonic damages under Daubert . See Jennings v. Nash , No. 18-3261-CV-C-WJE, 2020 WL 770325, at *2–3 (W.D. Mo. Feb. 17, 2020) (noting Smith's testimony was not necessary or reliable to assist the jury with understanding a fact at issue); Cramer v. Equifax Info. Servs. , No. 4:18-CV-1078 CAS, 2019 WL 4468945, at *6 (E.D. Mo. Sept. 18, 2019) (noting Smith's hedonic damages testimony was not reliable to help the jury understand a fact at issue); Fams. Advoc., LLC v. Sanford Clinic N. , No. 3:16-cv-114, 2019 WL 1548911, at *7–8 (D.N.D. Feb. 11, 2019) (determining Smith's testimony was not sufficiently connected to the facts of the case).
Other district courts around the country have also excluded Smith's hedonic damages testimony as irrelevant and unreliable. See, e.g., Allen v. Bank of Am., N.A. , 933 F. Supp. 2d 716, 734 (D. Md. 2013) (noting Smith's calculation lacked a reliable foundation to assist the jury in assessing damages); Richman v. Burgeson , No. 98 C 7350, 2008 WL 2567132, at *2–5 (N.D. Ill. June 24, 2008) (excluding Smith's calculation as to the dollar value of hedonic damages but allowing Smith to testify about hedonic damages as a concept); Davis v. ROCOR Int'l , 226 F. Supp. 2d 839, 842 (S.D. Miss. 2002) (noting Smith's testimony would not assist the jury in determining an issue of fact). But a minority of district courts have admitted Smith's testimony. See Farring v. Hartford Fire Ins. Co. , No. 2:12-CV-479, 2014 WL 12770120, at *2 (D. Nev. Mar. 14, 2014) (admitting Smith's testimony because it determined the method was widely used by economists, reliable, and the "jury w[ould] be free to accept or reject Dr. Smith's conclusions as it s[aw] fit"); Lee v. Overbey , No. 08-2115, 2009 WL 10673099, at *1 (W.D. Ark. July 31, 2009) (admitting Smith's hedonic damages testimony because "[v]aluation of a human life [was] not capable of direct verification or falsification, so error rates and testing [were] not useful means of gauging reliability").
Finally, Circuit Courts of Appeals have routinely overturned the admission or upheld the exclusion of Smith's testimony calculating hedonic damages. See Smith v. Jenkins , 732 F.3d 51, 66–67 (1st Cir. 2013) (finding the district court should have excluded Smith's hedonic damages testimony because his method is unreliable and unlikely to assist the trier of fact); Smith v. Ingersoll-Rand Co. , 214 F.3d 1235, 1244–46 (10th Cir. 2000) (affirming the district court's decision to exclude Smith's hedonic damages testimony as unreliable but permitting testimony as to the meaning of hedonic damages); Mercado v. Ahmed , 974 F.2d 863, 871 (7th Cir. 1992) (finding testimony "would not aid the jury in evaluating the evidence and arriving at its verdict"); but see Sherrod v. Berry , 827 F.2d 195, 205–06 (7th Cir. 1987), vacated , 835 F.2d 1222 (7th Cir. 1988), reversed and remanded , 856 F.2d 802 (7th Cir. 1988). The Court finds persuasive the non-binding precedent excluding Smith's testimony on hedonic damages.
Moe emphasizes the Seventh Circuit's decision in Sherrod v. Berry , which upheld the admission of Smith's testimony in a wrongful death case. ECF No. 46-37 at 19 (citing Sherrod v. Berry , 827 F.2d at 205–06 ). However, when presented with the question of the admissibility of Smith's testimony several years later in a personal injury case, the Seventh Circuit upheld the district court's exclusion of the testimony. Mercado , 974 F.2d at 871.
Grinnell College does not contest Smith's qualifications. See ECF No. 34. And the Court finds no reason to question his qualifications. Cf. Moran , 476 F.2d at 291. Smith's curriculum vitae demonstrates his qualifications and extensive experience in the forensic economics field. ECF No. 34-3 at 1–11; see Hill , 454 F.2d at 1203. The Court therefore focuses on the first and third requirements under Daubert —relevance and reliability. See 509 U.S. at 592–93, 113 S.Ct. 2786 ; Lauzon , 270 F.3d at 686.
Like other courts, the Court finds the contested portion of Smith's expert report and testimony is not relevant in this case. See, e.g., Kurncz v. Honda N. Am. , 166 F.R.D. 386, 390 (W.D. Mich. 1996) ("Giving the jury a number based on lay preferences ... is no more helpful ... than informing them of other jury verdicts ...."); Allen , 933 F. Supp. 2d at 734 (finding Smith's hedonic damages calculation would not assist the jury). "Hedonic damages are used to approximate the loss of the value of life, and therefore are used in cases involving death or injury." Cramer , 2019 WL 4468945, at *6 (internal quotation marks and citation omitted); see also Pl.’s Ex. 27 Supp. Resist. Def.’s Mot. Strike Expert Test. 4, ECF No. 46-25 (Stan V. Smith, Hedonic Damages in the Courtroom Setting—A Bridge Over Troubled Waters , 3 J. Forensic Econ. 41, 45 (1990)) ("Aside from measuring the value of life in wrongful death, the value of life literature can be used ... in non-fatal injury ..."). Here, the record does not indicate Moe experienced physical injury. Rather, Moe claims damages because he was subject to Grinnell College's allegedly biased Title IX disciplinary proceedings and was expelled. See ECF No. 1 ¶¶ 1, 2, 206–58. Because Smith's reduction in value of life assessment is based on Moe's alleged non-physical injury, Smith's hedonic damages calculation does not make any fact of consequence about Moe's damages more or less probable. See Fed. R. Evid. 401(a), (b). In short, Smith's calculation is irrelevant and unhelpful to the jury.
The Court also finds the contested portion of Smith's expert report and testimony unreliable. "[T]he law grants the trial judge broad latitude to determine" the reliability of expert evidence. Kumho Tire Co., Ltd. , 526 U.S. at 153, 119 S.Ct. 1167. The overarching subject of a court's inquiry "is the scientific validity—and thus the evidentiary ... reliability—of the principles that underlie a proposed submission." Daubert , 509 U.S. at 594–95, 113 S.Ct. 2786. To analyze the reliability of evidence under Daubert , a court considers four factors:
(1) whether the theory or technique can be or has been tested; (2) whether the theory or technique has been subjected to peer review or publication; (3) whether the theory or technique has a known or potential error rate and standards controlling the technique's operation; and (4) whether the theory or technique is generally accepted in the scientific community.
Russell v. Whirlpool Corp. , 702 F.3d 450, 456 (8th Cir. 2012). "This evidentiary inquiry is meant to be flexible and fact specific." Id. (internal quotations marks and citation omitted). "A court may conclude that there is simply too great an analytical gap between the data and the opinion proffered" to admit the expert testimony. Gen. Elec. Co. v. Joiner , 522 U.S. 136, 146, 118 S.Ct. 512, 139 L.Ed.2d 508 (1997). The Court finds the method Smith used to calculate Moe's reduction in value of life is unreliable under Daubert.
Under the first factor, the Court considers whether Smith's method can be or has been tested. See Russell , 702 F.3d at 456. The Court finds it cannot be tested. Smith bases his hedonic damages calculation on Moe's self-reported percent reduction in the value of his life. ECF No. 37 at 7; see also ECF No. 48-4 at 4–7. Aside from the interview, Smith provides no support for Moe's self-reported percentages. See ECF No. 37 at 7. There is no indication Smith used objective indicia to determine how or why Moe reported these percentages. See id. at 7–8. Furthermore, Smith fails to use "readily measured and objective items" to calculate Moe's percent reduction in the value of his life. Ex. 18 Supp. Smith's Decl. Re: Pl.’s Resist. Def.’s Mot. Strike Expert Test. 8, ECF No. 46-16 (Ted. R. Miller, Hedonic Damages: Were the Body Blows to the Golden Goose Well-Founded? , 20 J. Forensic Econ. 137–53 (2007)).
Moe argues Smith's assessment of hedonic damages is testable and "it is standard and recommended forensic economic practice to conduct an informational interview to obtain information regarding the percentage loss assessment to an injured party." Smith's Decl. Supp. Pl.’s Resist. Def.’s Mot. Strike Expert Test. ¶¶ 20–21, ECF No. 46-2; ECF No. 46-37 at 11–12. Smith's report and declaration submitted in support of Moe's resistance reference an article Smith co-authored: Hedonic Damages and Personal Injury: A Conceptual Approach. Smith's Decl. ¶ 20, ECF No. 46-2; ECF No. 37 at 11; see also Ex. 19 Supp. Smith's Decl. Re: Pl.’s Resist. Def.’s Mot. Strike Expert Test., ECF No. 46-17 (the article). Moe offers this article to demonstrate Smith's interview with Moe and Moe's self-reported percent reduction in the value of his life are testable and verifiable. ECF No. 46-37 at 11–12. The Court's review of the article reveals that the testable method addressed was not the method Smith employed. The cited article indicates "an individual's hedonic loss" can be quantified after a psychologist or mental health professional evaluates "the person's post-injury lifestyle." ECF No. 46-17 at 2–3. This is accomplished "[t]hrough the use of psychological tests, questionnaires, and interviews" "with th[e injured] person and his or her family." Id. Another article cited in Smith's declaration states "it is probably best for medical, psychological, and/or rehabilitation experts to do the assessment" of the injured person. ECF No. 46-16 at 8. That same article emphasizes "the measurement scale [for reduction in value] should avoid subjective self-report[ing], instead relying on readily measured and objective items." Id. According to the record before the Court, Smith did not follow this procedure to determine Moe's percent reduction in the value of his life. Smith is not a psychologist—or a medical, psychological, or rehabilitation expert; he did not administer psychological tests or questionnaires; he did not interview Moe's family; and he did not avoid subjective self-reporting. See ECF No. 34-3 at 1–2; ECF No. 37 at 7. This aspect of Smith's calculation formula precludes objective testing. Cf. Allen , 933 F. Supp. 2d at 734 (excluding Smith's testimony because his "opinion [was] based almost entirely on asking laypersons how a particular event has affected their enjoyment of life"). Thus, the method for calculating hedonic loss, which Smith contends is testable is not the method Smith used in Moe's case. Smith offers no other support showing the method he used to calculate Moe's percent reduction in the value of life can be reliably tested. Smith's method fails the first Daubert factor.
As to the second Daubert factor—peer review—the record provides no indication Smith's method for calculating hedonic damages, including his interview method to determine the percent reduction in value of life, has been subjected to peer review. Cf. Russell , 702 F.3d at 456. Smith's report discusses the "extraordinarily extensive" peer review of the "concepts and methodology." ECF No. 37 at 9–10. The Court's review of the literature Smith cites in his report reveals the value of a statistical life concept and methodology has enjoyed robust peer review. See id. ; see also Exs. 10–31, 38 Supp. Smith's Decl. Re: Pl.’s Resist. Def.’s Mot. Strike Expert Test., ECF Nos. 46-8 to 46-29, 46-36. These materials do not demonstrate Smith's method for calculating hedonic damages has been subjected to peer review. See, e.g., id. Further, these materials do not demonstrate peer-reviewed use of hedonic damages calculations in cases that do not involve death or physical injury. See, e.g. , ECF No. 46-29 (noting forensic economists have used studies on the value of a statistical life in wrongful death and personal injury cases). This case involves neither death nor physical injury. Therefore, the Court finds Smith's method of calculating hedonic damages fails the second Daubert factor.
Smith's method of calculating hedonic damages also fails under the third Daubert factor—the existence of an error rate and standards governing the method's operation. See Russell , 702 F.3d at 456. In his report, Smith declares his value-of-life calculation's "known or potential rate of error is well researched." ECF No. 37 at 10. The Court's review of the parties’ filings indicates otherwise. The provided academic "articles discuss the known or potential rate of error" of the techniques used to determine the value of a statistical life—only one "factor" used in Smith's hedonic-damages method. Id. The Court finds no materials in the record addressing the potential error rate of or standards controlling Smith's use of a self-reported assumed-impairment rating. Furthermore, neither Smith's report nor the parties’ filings contain governing standards as to the method used to arrive at Moe's self-reported reduction in the value of his life. Smith appears to merely report the estimate Moe provided during the interview. See id. In fact, as discussed above, it appears Smith did not follow the governing standards he helped establish. See ECF No. 46-17. The Court finds Smith's hedonic damages method fails the third Daubert factor.
Under the final factor, the Court considers whether Smith's formula is "generally accepted in the scientific community." Russell , 702 F.3d at 456. The variability across economic peer-reviewed literature appears to demonstrate forensic economists cannot agree on "what elements ought to go into the [value of] life evaluation." Kurncz , 166 F.R.D. at 389 (internal quotation marks and citation omitted). Further, other courts have found "[t]here is no unanimity on which studies ought to be considered" in willingness-to-pay meta-analyses to arrive at a value of a statistical life. Id. (internal quotation marks and citation omitted). The reported variations in estimates of the value of a statistical life—from $0.5 million to $50 million in 2000s dollars—may indicate a lack of general acceptance and few standards governing the willingness-to-pay model. See ECF No. 46-15 at 3, 6 (Francois Bellavance, et al., The Value of a Statistical Life: A Meta-Analysis With A Mixed Effects Regression Model , 28 J. Health Econ. 444, 448 (2009)). Nonetheless, even if the methodology used to determine the value of a statistical life meets the fourth Daubert factor, the record does not indicate Smith's use of that value in his hedonic-damages formula or Smith's method itself is generally accepted by economists. Smith's report and related testimony regarding hedonic damages fails the fourth Daubert factor.
Further, Smith's hedonic damages calculation method provides no information jurors could not assess independently. As other courts have noted, the willingness-to-pay studies comprising Smith's meta-analysis for the value of a statistical life are a "compilation of lay responses." Kurncz , 166 F.R.D. at 390. Additionally, Moe's estimation of the percentage reduction in his ability to lead a normal life is just that: his own estimate. The jury could learn those reported percentages from Moe's testimony. Because lay responses comprise the key figures in Smith's method, "a jury is perfectly capable of determining [hedonic] damages without any expert testimony." Allen , 933 F. Supp. 2d at 734. The Daubert reliability factors weigh against admitting Smith's expert report and anticipated testimony regarding hedonic damages.
The Court finds the portion of Smith's expert report regarding hedonic damages and related testimony is unreliable under Daubert. Smith's method for calculating hedonic damages cannot be tested, relies on self-reported information with no method for verification, has not been subject to peer review, lacks standards governing its operation, and is not generally accepted by economists. Thus, this evidence is inadmissible under Rule 702. The Court grants Grinnell College's motion to strike the portion of Smith's report concerning the hedonic damages calculation and related testimony.
B. Rule 403
Although the Court finds Smith's expert testimony is inadmissible under Rule 702, the Court also conducts a Rule 403 analysis, balancing any possible probative value of Smith's expert testimony against the risk of misleading the jury. Grinnell College contends the portion of Smith's expert report regarding hedonic damages and his related testimony create the risk that the jury may defer to Smith's hedonic damages estimates without considering other evidence or conducting its own assessment. ECF No. 34-1 at 9–10. Moe argues Smith's expert report concerning hedonic damages and related testimony will not mislead the jury because the complexities of the evidence can be clarified through Smith's testimony and on cross-examination. ECF No. 46-37 at 19–20. Additionally, Moe argues exclusion is improper because Grinnell College opposes the report's factual basis, which goes to its credibility, not its admissibility. Id. at 19.
Smith's hedonic damages calculation poses a risk of misleading the jury because one of the three "factors" Smith uses in his formula is based solely on Moe's self-reported percentages. See ECF No. 37 at 7. Consequently, the calculation provides little probative value and is unhelpful to the jury. There is a risk the jury may accept Smith's hedonic damages calculation based on the self-reported percentages as true while overlooking the calculation's speculative nature and problematic foundations. Cf. Werth v. Hill-Rom, Inc. , 856 F. Supp. 2d 1051, 1067 (D. Minn. 2012) (excluding expert opinion as to causation due to concerns "jury would blindly accept [expert's] causation theory while overlooking the shaky foundation upon which it rests"); Tunnell v. Ford Motor Co. , 330 F. Supp. 2d 731, 741–42 (W.D. Va. 2004) (recommending expert opinion based on speculation be excluded under to Rule 403 ); Kurncz , 166 F.R.D. at 390 ("Mr. Smith's method ... invites the jury to abandon its own perceptions of what is important to the particular case and its value in favor of guess-work as to how much his figures have already taken those factors into consideration."). The probative value of Smith's testimony is substantially outweighed by the risk of misleading the jury. See United States v. Coutentos , 651 F.3d 809, 821 (8th Cir. 2011) ("Where the subject matter is within the knowledge or experience of lay people, expert testimony is superfluous." (internal quotation marks and citation omitted)).
Because the probative value of Smith's report calculating hedonic damages and related testimony is outweighed by the risk of misleading the jury, the Court excludes this evidence under to Rule 403.
V. CONCLUSION
Smith's hedonic damages calculation is not sufficiently reliable for admission at trial because the method is not testable, has not been peer reviewed, lacks governing standards, and is not generally accepted by economists. Additionally, Smith's method to determine the percent reduction in the value of life is not based on objective indicia because it relies on self-reported percentages. Furthermore, hedonic damages are not relevant because Moe has not experienced physical injury or death. As a result, the portion of Smith's expert report and related testimony concerning hedonic damages is inadmissible under Rule 702. The probative value of Smith's expert report is also outweighed by the threat it poses of misleading the jury. The Court excludes the portion of Smith's expert report concerning hedonic damages and related testimony under Rule 403.
IT IS ORDERED that Defendant Grinnell College's Motion to Strike Expert Testimony, ECF No. 34, is GRANTED.