Pacific Life Insurance Company v. The Bank of New York Mellon

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

PACIFIC LIFE INSURANCE COMPANY and

PACIFIC LIFE & ANNUITY COMPANY,

Plaintiffs,

17 Civ. 1388 (KPF)

-v.-

OPINION AND ORDER

THE BANK OF NEW YORK MELLON,

Defendant.

KATHERINE POLK FAILLA, District Judge:

Pending before the Court is a challenge to one portion of the February 2,

2021 Decision and Order issued by United States Magistrate Judge Robert W.

Lehrburger (the “February 2021 Order”), addressing the motions of Pacific Life

Insurance Company (“PacLife”) and Pacific Life & Annuity Company (together,

“Plaintiffs”) and the Bank of New York Mellon (“Defendant” or “BNYM”) to

exclude expert opinion testimony pursuant to Federal Rule of Evidence 702

and cases including Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579

(1993). In particular, Defendant has filed objections pursuant to Federal Rule

of Civil Procedure 72 to Judge Lehrburger’s exclusion of opinion testimony

from defense expert Thomas Lys. After careful review of the underlying

materials and the parties’ arguments, the Court rejects Defendant’s objections

and affirms the February 2021 Order.

BACKGROUND1

The Court presumes familiarity with the factual and procedural

backgrounds of this case, both of which are detailed in the Court’s March 16,

2018 Opinion and Order on Defendant’s motion to dismiss. (Dkt. #53 (the

“March 2018 Order”)). A brief overview is set forth herein, drawing in part from

the recitation of the facts in the March 2018 Order.

A. Factual Background

The instant action is one of several cases in this District in which

certificateholders of residential mortgage-backed securities (“RMBS”) trusts

brought claims against their common trustees. Plaintiffs here are

certificateholders of 13 securitization trusts who claim that Defendant BNYM

breached its contractual, fiduciary, and common-law duties, as well as its

duties under the Trust Indenture Act of 1939 (the “TIA”), 15 U.S.C. § 77aaa,

and the Streit Act, N.Y. Real Property Law § 124. Plaintiffs further claim that

Defendant was negligent in failing to avoid conflicts of interest and to perform

ministerial acts with due care.

1 The facts in this Opinion are drawn from Plaintiffs’ complaint (“Complaint” or “Compl.”

(Dkt. #1)). The Court presumes all well-pleaded allegations in the Complaint as true, as

it must at this stage. See, e.g., Peralta v. St. Luke’s Roosevelt Hosp., No. 14 Civ. 2609

(KPF), 2015 WL 3947641, at *1 n.1 (S.D.N.Y. June 26, 2015). For ease of reference, the

Court will refer to Defendant’s memorandum of law in support of its Rule 72 objections

as “Def. Br.” (Dkt. #218); Plaintiffs’ response to Defendant’s Rule 72 objections as “Pl.

Resp.” (Dkt. #224); and Defendant’s reply brief in further support of its Rule 72

objections as “Def. Reply” (Dkt. #228). The Court refers to the declarations in support

of the parties’ briefing and the exhibits attached thereto using the convention “[Name]

Decl., Ex. [].”

B. Relevant Procedural Background

On October 2, 2020, Plaintiffs and Defendant filed motions in limine to

exclude the testimony of the other side’s expert witnesses, resulting in

challenges to thirteen experts in total. (Dkt. #150-165). On December 8, 2020,

the Court referred these motions to Magistrate Judge Robert W. Lehrburger for

resolution. (Dkt. #213). On February 22, 2021, Judge Lehrburger issued a

Decision and Order on the parties’ respective motions in limine, granting them

in part and denying them in part. (Dkt. #216 (the “February 2021 Order”)). As

relevant here, Judge Lehrburger excluded in full the testimony of one of

Defendant’s expert witnesses, economics professor Thomas Lys, whom

Defendant had retained to assess “whether, from an economic perspective, the

ability of Countrywide [the obligor under the governing agreements] to pay put-

back claims as alleged by Plaintiffs could be relevant for a damages calculation

as a stand-alone entity.” (Dkt. #165-25, ¶ 19 (“Lys Report”)). Citing numerous

deficiencies, Judge Lehrburger found Lys’s testimony to be “unreliable,

speculative, indefinite, and unhelpful to the jury.” (February 2021 Order at

42).

On March 8, 2021, Defendant filed objections to the February 2021

Order, asking this Court to set aside Judge Lehrburger’s decision with respect

to the exclusion of Lys’s testimony. (Dkt. #218). On March 22, 2021, Plaintiffs

opposed Defendant’s objections (Dkt. #220, 224-225), and on March 29, 2021,

Defendant replied to Plaintiffs’ opposition (Dkt. #228-229). Neither side

objected to Judge Lehrburger’s rulings as to any of the remaining twelve expert

witnesses.

DISCUSSION

A. Applicable Law

1. Standard of Review of a Magistrate Judge’s Order

The standard of review that a district court applies to a magistrate

judge’s order “depends on whether the issue decided by the magistrate judge is

dispositive or nondispositive.” Blackrock Allocation Target Shares: Series S.

Portfolio v. Wells Fargo Bank, Nat’l Ass’n, No. 14 Civ. 10067 (KPF), 2018 WL

3863447, at *3 (S.D.N.Y. Aug. 13, 2018) (internal citation omitted); see

generally Kiobel v. Millson, 592 F.3d 78, 106 (2d Cir. 2010) (Jacobs, J.,

concurring). Whereas dispositive orders are subject to de novo review, if a

party timely objects to a magistrate judge’s nondispositive order, a district

court may only “modify or set aside any part of the order that is clearly

erroneous or is contrary to law.” Fed. R. Civ. P. 72(a); see also 28 U.S.C.

§ 636(b)(1)(A).

Orders involving discovery are considered nondispositive. Blackrock,

2018 WL 3863447, at *3. In particular, “the decision to admit or exclude

expert testimony is considered nondispositive of an action.” Sansalone v. Bon

Secours Charity Health Sys., No. 05 Civ. 8606 (BSJ), 2009 WL 1649597, at *2

(S.D.N.Y. June 9, 2009) (collecting cases). Accordingly, a district court must

affirm such orders unless they are “clearly erroneous or contrary to law.” 28

U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a); see also Blackrock, 2018 WL

3863447, at *3.

This standard of review is “highly deferential,” and “magistrates are

afforded broad discretion in resolving discovery disputes.” Sec. & Exch.

Comm’n v. Contrarian Press, No. 16 Civ. 6964 (VSB), 2020 WL 7079484, at *1

(S.D.N.Y. Dec. 2, 2020) (internal citations omitted). “An order is clearly

erroneous only when the reviewing court on the entire evidence is left with the

definite and firm conviction that a mistake has been committed” and is

“contrary to law if ‘it fails to apply or misapplies relevant statutes, case law or

rules of procedure.’” Blackrock, 2018 WL 3863447, at *3 (quoting Khaldei v.

Kaspiev, 961 F. Supp. 2d 572, 575 (S.D.N.Y. 2013)). “[T]he objector thus

carries a heavy burden.” Khaldei, 961 F. Supp. 2d at 575.

2. Admissibility of Expert Opinion Testimony

Judge Lehrburger’s February 2021 Order addressed the admissibility of

expert testimony, and this Court accordingly proceeds to consider the legal

standards on that issue. The Supreme Court has tasked district courts with a

“gatekeeping” role with respect to expert opinion testimony. Daubert, 509 U.S.

at 597 (holding that it is the district court’s responsibility to ensure that an

expert’s testimony “both rests on a reliable foundation and is relevant to the

task at hand”). This “gatekeeping” function applies whether the expert

testimony is based on scientific, technical, or “other specialized” knowledge.

Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 141 (1999). “It is well-

established that the trial judge has broad discretion in the matter of the

admission or exclusion of expert evidence[.]” Boucher v. U.S. Suzuki Motor

Corp., 73 F.3d 18, 21 (2d Cir. 1996) (citation and quotation marks omitted).

Federal Rule of Evidence 702 provides:

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. A court’s inquiry thus focuses on three issues: (i) whether

the witness is qualified to be an expert; (ii) whether the opinion is based upon

reliable data and methodology; and (iii) whether the expert’s testimony on a

particular issue will assist the trier of fact. Nimely v. City of New York, 414

F.3d 381, 396-97 (2d Cir. 2005). “[T]he proponent of expert testimony has the

burden of establishing by a preponderance of the evidence that the

admissibility requirements of Rule 702 are satisfied[.]” United States v.

Williams, 506 F.3d 151, 160 (2d Cir. 2007).

In the instant case, item one is obviated by the absence of any challenge

to Lys’s qualifications as an expert. Accordingly, the Court focuses on the

reliability of Lys’s testimony and its helpfulness to the jury.

a. Reliability of Expert Testimony

Once a court has determined that a witness is qualified as an expert, it

must ensure that the expert’s testimony both “rests on a reliable foundation

and is relevant to the task at hand.” Daubert, 509 U.S. at 597. In order to be

admissible, “[a]n expert opinion requires some explanation as to how the expert

came to his conclusion and what methodologies or evidence substantiate that

conclusion.” Riegel v. Medtronic, Inc., 451 F.3d 104, 127 (2d Cir. 2006), aff’d

on other grounds, 552 U.S. 312 (2008).

Rule 702 requires that “expert testimony rest on ‘knowledge,’ a term that

‘connotes more than subjective belief or unsupported speculation.’” In re

Rezulin Prod. Liab. Litig., 309 F. Supp. 2d 531, 543 (S.D.N.Y. 2004) (quoting

Daubert, 509 U.S. at 590). “[A] trial judge should exclude expert testimony if it

is speculative or conjectural or based on assumptions that are so unrealistic

and contradictory as to suggest bad faith.” Zerega Ave. Realty Corp. v.

Hornbeck Offshore Transp., LLC, 571 F.3d 206, 213-14 (2d Cir. 2009) (citation

and quotation marks omitted). “[O]ther contentions that the assumptions are

unfounded go to the weight, not the admissibility, of the testimony.” Id.

(alteration in original) (citation omitted).

“In deciding whether a step in an expert’s analysis is unreliable, the

district court should undertake a rigorous examination of the facts on which

the expert relies, the method by which the expert draws an opinion from those

facts, and how the expert applies the facts and methods to the case at hand.”

Amorgianos v. Nat’l R.R. Passenger Corp., 303 F.3d 256, 267 (2d Cir. 2002). “A

district court has discretion under Federal Rule of Evidence 703 to determine

whether the expert acted reasonably in making assumptions of fact upon

which he would base his testimony.” Boucher, 73 F.3d at 21 (internal

quotation marks and citations omitted). “A minor flaw in an expert’s reasoning

or a slight modification of an otherwise reliable method” does not itself require

exclusion; exclusion is only warranted “if the flaw is large enough that the

expert lacks good grounds for his or her conclusions.” Amorgianos, 303 F.3d at

267 (citation and internal quotation marks omitted). This is because “our

adversary system provides the necessary tools for challenging reliable, albeit

debatable, expert testimony.” Id. “Vigorous cross-examination, presentation of

contrary evidence, and careful instruction on the burden of proof are the

traditional and appropriate means of attacking shaky but admissible evidence.”

Id. (quoting Daubert, 509 U.S. at 596).

While a district court has “broad latitude” in deciding both “how to

determine reliability” and in reaching “its ultimate reliability determination,” it

may not abandon its “gatekeeping function.” Williams, 506 F.3d at 160-61

(citation omitted). “[N]othing in either Daubert or the Federal Rules of Evidence

requires a district court to admit opinion evidence that is connected to existing

data only by the ipse dixit of the expert.” Kumho Tire, 526 U.S. at 157 (internal

citation omitted). Thus, “when an expert opinion is based on data, a

methodology, or studies that are simply inadequate to support the conclusions

reached, Daubert and Rule 702 mandate the exclusion of that unreliable

opinion testimony.” Ruggiero v. Warner-Lambert Co., 424 F.3d 249, 255 (2d

Cir. 2005) (citing Amorgianos, 303 F.3d at 266).

b. Helpfulness or Relevance of Testimony

Separately, the Court must determine whether the proposed expert

testimony “will help the trier of fact to understand the evidence or to determine

a fact in issue.” Fed. R. Evid. 702. This inquiry looks primarily to whether the

testimony is relevant. See In re Zyprexa Prod. Liab. Litig., 489 F. Supp. 2d 230,

283 (E.D.N.Y. 2007) (citing Daubert, 509 U.S. at 591-92). Under the Federal

Rules of Evidence, evidence is relevant if it has a “tendency to make a fact more

or less probable than it would be without the evidence.” Fed. R. Evid. 401; see

also Daubert, 509 U.S. at 591-92 (“Rule 702’s ‘helpfulness’ standard requires a

valid scientific connection to the pertinent inquiry as a precondition to

admissibility.”).

A court should not admit expert testimony that is “directed solely to lay

matters which a jury is capable of understanding and deciding without the

expert’s help.” United States v. Mulder, 273 F.3d 91, 104 (2d Cir. 2001)

(quoting United States v. Castillo, 924 F.2d 1227, 1232 (2d Cir. 1991)); see also

Atlantic Specialty Ins. v. AE Outfitters Retail Co., 970 F. Supp. 2d 278, 291-92

(S.D.N.Y. 2013) (excluding expert’s “opinion on the extent of fire damage

resulting from [fire department’s] response time,” where expert’s opinion was

essentially that “a fire causes increasing damage the longer it burns,” because

“a lay person is entirely capable of reaching this conclusion without the help of

an expert”).

Expert testimony must also adhere to the other Federal Rules of

Evidence, including Rule 403, which provides that relevant evidence may still

be excluded “if its probative value is substantially outweighed by a danger of

one or more of the following: unfair prejudice, confusing the issues, misleading

the jury, undue delay, wasting time, or needlessly presenting cumulative

evidence.” Fed. R. Evid. 403. The Rule 403 inquiry is particularly important in

the context of expert testimony, “given the unique weight such evidence may

have in a jury’s deliberations.” Nimely, 414 F.3d at 397; see also Daubert, 509

U.S. at 595 (“‘Expert evidence can be both powerful and quite misleading

because of the difficulty in evaluating it. Because of this risk, the judge in

weighing possible prejudice against probative force under Rule 403 of the

present rules exercises more control over experts than over lay witnesses.’”

(quoting Jack B. Weinstein, Rule 702 of the Federal Rules of Evidence Is Sound;

It Should Not Be Amended, 138 F.R.D. 631, 632 (1991))).

B. Analysis

At the outset, the Court observes that it is a testament to Judge

Lehrburger’s thoughtful analysis that only one of his decisions is challenged.

That challenge is to his decision to exclude the opinion of defense expert

Thomas Lys, a specialist in financial economics working with Analysis Group,

who provided opinions about the extent to which Countrywide had the

wherewithal to repurchase loans and how that may affect a damages analysis.

(February 2021 Order at 41). In brief, Judge Lehrburger found problems with

Lys’s involvement in the preparation of his report; certain of the factual

underpinnings of his expert opinions; and the helpfulness vel non of his

opinions to a jury. (Id. at 41-44).

Defendant advances four arguments in its Rule 72 objections. First,

Defendant argues that the wholesale exclusion of Lys’s opinions based on his

own deposition testimony about the ostensibly flawed process used to generate

the report is clearly erroneous and contrary to law, because (i) Daubert does

not preclude the use of assistants in forming expert opinions; (ii) Lys’s

deposition testimony reflected close involvement in the preparation of the

report and intimate familiarity with its contents; and (iii) Judge Lehrburger

erroneously concluded that Lys did not understand why certain statements

were included in his report. (Def. Br. 5-13). Second, Defendant asserts

that challenges to an expert’s assumptions go to weight, not admissibility. (Id.

at 13-20). Third, Defendant argues that the February 2021 Order

impermissibly faulted Lys for failing to quantify Plaintiffs damages. (Id. at 21-

22). Fourth, Defendant claims that Judge Lehrburger improperly excluded

Lys’s opinions because of mere disagreement with their implications. (Id. at

23-24). Ultimately, this Court agrees with Judge Lehrburger’s finding that

Lys’s report was unreliable. Because this is a sufficient basis on which to

exclude Lys’s testimony, the Court need only address Defendant’s first two

arguments.

1. Lys Did Not Substantially Participate in the Preparation of the

Report

Judge Lehrburger found that “Lys’s lack of involvement and familiarity

with his own report renders its reliability highly suspect.” (February 2021

Order at 42). Defendant disagrees with Judge Lehrburger’s characterization of

Lys’s involvement in the drafting of the report, arguing that “it is well settled

that assistants may help experts research and draft their reports,” and,

further, that “[t]here is no authority for the proposition that merely failing to

recall who wrote what is grounds for exclusion.” (Def. Br. 7-8). Defendant is

correct on the law, but Judge Lehrburger was equally correct in applying that

law to the facts of this case.

To begin, Defendant is correct that “an expert may rely on assistants or

the opinions of other experts in formulating their own expert opinions.”

Faulkner v. Arista Recs. LLC, 46 F. Supp. 3d 365, 385 (S.D.N.Y. 2014). The

rules of evidence “allow an expert to present the work of others if the expert

supervised, directed, or participated in that work, and if the expert is qualified

in the field and could perform the work themselves.” In re M/V MSC Flaminia,

No. 12 Civ. 8892 (KBF), 2017 WL 3208598, at *2 (S.D.N.Y. July 28, 2017). By

contrast, “[t]he Court will preclude proffered witnesses who simply aggregate or

recite the opinions of others.” Id. In other words, “[t]he expert witness must in

the end be giving his own opinion. He cannot simply be a conduit for the

opinion of an unproduced expert.” Malletier v. Dooney & Bourke, Inc., 525 F.

Supp. 2d 558, 664 (S.D.N.Y. 2007) (excluding testimony of expert witness who

purported to rely on another expert over whom he “exercised little if any

supervision”).

In the February 2021 Order, Judge Lehrburger did not take issue with

Lys’s use of assistants, but rather with Lys’s “considerable lack of familiarity

with his report.” (February 2021 Order at 42). And despite Defendant’s

present contention that Lys claims “ownership of everything in his report” (Def.

Br. 9), it is clear from Lys’s deposition testimony that he did not substantially

participate in the preparation of his report. Judge Lehrburger found that, at

his deposition,

Lys conceded that he could not identify in his report

anything specific that he wrote; could not recall how

much time he spent editing the report or any details of

directions he gave for its preparation; could not identify

which Analysis Group individuals performed what tasks

or even describe the supervision he purportedly

provided other than to say “they did what I told them to

do,” which he could not specify; and “rel[ied] on their

hours to collect data, to analyze data, and to, you know,

produce the product.”

(February 2021 Order at 42 (quoting Dkt. #165-24 (“Lys Dep.”) at 21-25, 28-

29)).

Indeed, Lys’s deposition testimony reveals that while Lys was able to

identify the names of four individuals at Analysis Group with whom he worked,

he was unable to describe what any of them did in connection with the

preparation of the report. (Lys Dep. 21-22). Lys could not identify “all the

people who wrote words that appear in the report,” nor did he know how many

such people there were. (Id. at 23). Lys could not even recall whether he

personally wrote an initial draft of the report or whether the draft had been

sent to him by someone else. (Id. at 24-25).

In Bank of New York Mellon v. WMC Mortgage, LLC, which Judge

Lehrburger cited in the February 2021 Order, a sister court in this District

excluded an expert’s opinion even though the expert claimed his report

contained his analysis and was “prepared at my direction or adopted by me

based on my review and analysis of the quality and integrity of the . . . analysis

performed by others.” No. 12 Civ. 7096 (DLC), 2015 WL 4887446, at *3

(S.D.N.Y. Aug. 17, 2015). The court found that the expert “[did] not know the

experience of any of [the reunderwriters] who worked on this project, [and] he

[was] unaware of the instructions they were given or the extent to which their

work was subject to quality control.” Id. at *6. Lys’s deposition testimony

confirms that his level of involvement in the preparation of his report was

similarly deficient. It was thus not clear error for Judge Lehrburger to find

Lys’s participation in developing the report to be fatally lacking.

2. Lys’s Report Is Predicated on a Key Assumption That

Undermines Its Reliability and Usefulness to the Jury

Lys’s lack of involvement in the preparation of the report begets a second

problem: an expert may not “merely adopt another expert’s opinions as his or

her own reflexively and without understanding the materials or methods

underlying the other expert’s opinions.” U.S. Bank N.A. v. PHL Variable Life

Ins. Co., 112 F. Supp. 3d 122, 131 (S.D.N.Y. 2015); see also Mason v. AmTrust

Fin. Servs., Inc., No. 19 Civ. 8364 (DLC), 2020 WL 7425254, at *5 (S.D.N.Y.

Dec. 18, 2020) (excluding opinion of expert who relied in part on figures

provided by plaintiff, with “no explanation of their source” or “any reason to

believe that they rest on a reliable foundation”); Arista Recs. LLC v. Usenet.com,

Inc., 608 F. Supp. 2d 409, 428 (S.D.N.Y. 2009) (excluding expert’s opinions

that were “merely a restatement of Defendant[’s] views and [were] not the

product of independent analysis”); In re Zyprexa, 489 F. Supp. 2d at 288

(excluding expert’s testimony as to the specifics of how Zyprexa’s regulatory

issues were processed by the FDA, because the expert had not conducted

independent analysis of the issues and lacked specific knowledge of the

matter); Gary Price Studios, Inc. v. Randolph Rose Collection, Inc., No. 03 Civ.

969 (CSH), 2006 WL 1319543, at *8 (S.D.N.Y. May 11, 2006) (granting motion

to exclude expert testimony where court found expert was, in large measure,

parroting the testimony of the plaintiff); Rowe Entm’t, Inc. v. William Morris

Agency, Inc., No. 98 Civ. 8272 (RPP), 2003 WL 22124991, at *6 (S.D.N.Y.

Sept. 15, 2003) (excluding expert’s damages calculation under Daubert, in part,

for failing to perform any independent analysis to validate information provided

by the plaintiff).

Lys’s report is predicated on a key assumption related to Countrywide’s

exposure to hypothetical put-back claims, an assumption that ultimately limits

the report’s reliability and usefulness to the jury. As explained in that report,

[t]o determine Countrywide’s ability to pay the put-back

claims BNYM would have pursued in the but-for world,

it is necessary to know: [i] the amount of the alleged

put-back claims; [ii] when such claims would allegedly

have been paid; [iii] other potential claims Countrywide

faced at the same time; and [iv] the assets available to

Countrywide at the time to pay such claims.

(Lys Report ¶ 23). Because he claimed that Plaintiffs had not yet identified the

specific loans that allegedly should have been repurchased or the precise

timing of payments on these loans, Lys focused his analysis on his third-listed

factor, that is, the other potential claims against Countrywide. In this regard,

Lys noted that in addition to the thirteen trusts at issue in this case, Defendant

was the trustee for at least 518 other trusts with Countrywide loans. (Id. at

¶ 50). According to the report, had Defendant pursued put-back claims with

respect to all 531 of these trusts, and had each trust experienced similar

losses, then those losses would have totaled over $18.7 billion — a number

significantly in excess of Countrywide’s $6.1 billion in adjusted assets. (Id. at

¶¶ 52, 55). This extrapolation is key to Lys’s conclusion that “Countrywide’s

ability to pay the alleged put-back claims … is a matter of real economic

significance that must be considered in assessing Plaintiffs’ damages claims”

(id. at ¶ 55), because it relies on the assumption that the 531 trusts are

similarly situated. Indeed, the report recites, “I understand that the contracts

that Plaintiffs allege obligated BNYM to pursue put-back claims related to the

At-Issue Trusts are similar to BNYM’s contracts related to other trusts with

Countrywide loans.” (Id. at ¶ 50). Critically, nowhere was Lys able articulate a

valid basis for this assumption.

At his deposition, Lys was asked to explain the basis for his

understanding that the at-issue trusts were similar to the not-at-issue trusts.

Lys responded in part, “I believe my understanding came from counsel, but as I

sit here today, I don’t know where it came from.” (Lys Dep. 110:16-18). When

asked whether he himself looked at the pooling and servicing agreements

(“PSAs”) in the trusts to determine what was similar and what was not, Lys

stated, “I myself did not — it is quite possible that somebody on my team did”

(id. at 110:22-23), before hastening to add, “I don’t recall whether they did or

didn’t” (id. at 111:1). Similarly, when asked, “Whoever it is who conveyed that

the contracts were similar as described in [your report], do you know what

criteria they used to assess similarity,” Lys responded, “I don’t. I certainly

don't recall.” (Jd. at 111:7-11).

Lys’s testimony makes plain that his report is “not the product of

independent analysis.” Arista Recs. LLC, 608 F. Supp. 2d at 428. Separate

and apart from significant concerns about the preparation of the report, Judge

Lehrburger and this Court remain appropriately concerned about its factual

underpinnings. Not only do these issues render Lys’s testimony unreliable, but

they also render it unhelpful to the jury. See id. at 429 (“An expert who simply

repeats the hearsay of the client who retained him, without any independent

investigation or analysis, does not assist the trier of fact □□ understanding

matters that require specialized knowledge.”). It was thus not clearly

erroneous for Judge Lehrburger to find Lys’s report to be predicated on an

unfounded assumption, and to exclude it on that basis.

CONCLUSION

For the foregoing reasons, the Court finds that it was not clearly

erroneous for Judge Lehrburger to exclude Lys’s testimony. Accordingly,

Defendant’s Rule 72 objections are OVERRULED and DENIED.

SO ORDERED.

Dated: November 15, 2021 Kathe Intl fld-

New York, New York

KATHERINE POLK FAILLA

United States District Judge

17