In Bank of China v. NBM LLC, No. 02-9267 (2d Cir. Feb. 17, 2004), the 2nd Circuit reversed a jury’s $132 million civil RICO verdict in a bank fraud trial, in part because of a Fed. R. Evid. 701 violation. The plaintiffs offered an employee to testify in the form of lay opinion about various aspects of banking practice and custom and the district court admitted the testimony, citing the witness’ years of experience in international banking and “common sense.” Inasmuch as the testimony was based exclusively on the experience of the witness, the 2nd Circuit held that the testimony was subject to Fed. R. Evid. 702’s disclosure requirements for expert evidence, and not properly admissible as lay opinion. Although the 2nd Circuit observed that the Fed. R. Evid. 701 violations are subject to a harmless error analysis, the Court nevertheless concluded that the evidentiary error was not harmless, given that the witness’ testimony comprised nearly a thousand pages of the trial transcript.
Moral to this decision: Disclose your experts!

Following an earlier post on last week’s Chronicle article on the impact that tort reform is having on Harris County jurors, Professor Richard Alderman, who holds the Dwight Olds Chair in Law at the University of Houston Law Center, writes this op-ed in which he criticizes the effect of tort reform propaganda on the civil justice system. Professor Alderman notes the following in a part of his op-ed:

The United States does not regulate the marketplace by legislation. We regulate through the civil justice system. Private attorneys represent private citizens injured as the result of negligent, incompetent, careless or even willful conduct. Professionals maintain high standards, corporations follow the law, manufacturers develop safe products, landlords maintain security systems, and newspapers and television stations check and double check stories because of lawsuits. Our civil justice system is often the only recourse you have when you lose your money, your health or even your life. And an essential part of that system is the damages the Legislature and courts have determined may be recovered by an injured individual. Just as jurors must make the hard decision to imprison or even sentence a criminal to death, civil jurors have a duty to follow the law and award damages authorized by the Legislature.