Snead et al v. Wright et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
MONIQUE R. SNEAD, Individually,
and as Personal Representative of the
Estate of John H. Snead; et al.,
Plaintiffs,
vs.
GUADALUPE C. WRIGHT; et al.,
Defendants.
Case No. 3:19-cv-00092-JWS
3:19-cv-00209-JWS
CONSOLIDATED
ORDER
I. 	MOTION PRESENTED
At docket 134, Defendant Merrill Lynch, Pierce, Fenner & Smith
Incorporated 	(“Merrill 	Lynch”) filed 	a motion to exclude the 	proposed expert
testimony of Chris McConnell, the financial services industry expert for Plaintiffs
Monique R. Snead and John G. Snead (“Plaintiffs”). Plaintiffs filed an opposition at
docket 139. Merrill Lynch filed a reply at docket 142. Oral argument would not be of
assistance to the court.
II. 	BACKGROUND
This federal action involves a dispute involving certain Merrill Lynch
accounts held by John H. Snead, the father of Plaintiffs, who died in August 2017.
Plaintiffs allege that Defendant Guadalupe Wright (“Wright”), who had been in a long-
term relationship with John H. Snead up through his death and an employee of Merrill
Case 3:19-cv-00092-SLG Document 152 Filed 09/07/22 Page 1 of 9

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Snead v. Wright 	Case No. 3:19-cv-00092-JWS
Order Granting Stipulation to Extend Deadline to File Dispositive Motions 	Page 2
Lynch, 	unlawfully transferred 	funds 	from 	John H. Snead’s 	trust accounts and
fraudulently made herself the beneficiary of his annuity. 	In addition to the claims
asserted against Defendant Wright, Plaintiffs also allege that Merrill Lynch facilitated
these transactions for the benefit of Wright and to the detriment of the decedent and
Plaintiffs. 	They bring multiple causes of action against Merrill Lynch, including
breach of fiduciary duty, negligence, and fraudulent nondisclosure. In furtherance of
these claim, Plaintiffs retained Chris McConnell (“McConnell”) as an expert in the
financial services industry. 	Merrill Lynch moves to exclude all testimony from
McConnell, arguing that his expert report improperly presents opinions on legal issues
and that his opinions are unreliable because they are “replete with speculation,
mischaracterizations of evidence, factual errors and unsupported assertions.”1
III. 	LEGAL STANDARDS
Federal 	Rule 	of 	Evidence 	702 	permits 	a 	witness 	qualified 	by
“knowledge, skill, experience, training, or education” to offer expert testimony where:
(1) the testimony will help the trier of fact understand the evidence or determine a fact
in issue; (2) the testimony is based on sufficient facts or data; (3) the testimony is the
product of reliable principles and methods; and (4) the expert has reliably applied the
principles and methods to the facts of the case.2 This rule helps the court perform its
mandatory gatekeeping function to “assure that the expert testimony ‘both rests on a
1 Docket 134 at 2.
2 Fed. R. Evid. 702.
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Snead v. Wright 	Case No. 3:19-cv-00092-JWS
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reliable foundation and is relevant to the task at hand.’”3 “[T]estimony is relevant if
the knowledge underlying it has a valid connection to the pertinent inquiry.” 4
Testimony is reliable if it is rooted in the “knowledge and experience of the relevant
discipline.” 5 	The court’s role in analyzing reliability “is to analyze not what the
experts say, but what basis they have for saying it.”6 That is, reliability is not to be
conflated with credibility. “Shaky but admissible evidence is to be attacked by cross
examination, contrary evidence, and attention to the burden of proof, not exclusion.”7
The court must act as gatekeeper for both scientific and non-scientific
expert testimony, although it has flexibility in structuring how it determines whether
expert testimony is reliable and relevant. 8 	For non-scientific testimony, such as
testimony about industry practices and standards, reliability often cannot be measured
by examining the methodology, theories, or technical framework supporting the
opinion. Rather, reliability is more dependent on the knowledge and experience of the
expert.9 Exclusion of expert testimony should be “the exception rather than the rule.”10
3 Primiano v. Cook, 598 F.3d 558, 564 (9th Cir. 2010) (quoting Daubert v. Merrell Dow
Pharm., Inc., 509 U.S. 579, 597 (1993)).
4 Id. at 565 (quoting United States v. Sandoval-Mendoza, 472 F.3d 645, 654 (9th Cir. 2006)).
5 Id.
6 Wendell v. GlaxcoSmithKline LLC, 858 F.3d 1227, 1232 (9th Cir. 2017) (quoting Daubert
v. Merrell Dow Pharms., Inc., 43 F.3d 1311, 1316 (9th Cir. 1995)).
7 Primiano, 598 F.3d at 564.
8 United States v. Valencia-Lopez, 971 F.3d 891, 898 (9th Cir. 2020).
9 Hangarter v. Provident Life & Accident Ins. Co., 373 F.3d 998, 1017 (9th Cir. 2004).
10 Fed. R. Evid. 702 advisory committee’s note to 2000 amendment.
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Snead v. Wright 	Case No. 3:19-cv-00092-JWS
Order Granting Stipulation to Extend Deadline to File Dispositive Motions 	Page 4
IV. 	DISCUSSION
McConnell’s qualifications to testify about matters specific to financial
services are not in question here. He possesses an undergraduate degree in economics,
as well as a master’s degree in business administration. 	He has a background as a
Certified Public Accountant. He worked in the financial planning and advising sector
for twenty years before becoming an Accredited Investment Fiduciary Analyst (AIFA)
in 2004. He has experience in consulting on matters related to the securities, banking,
and financial services industry, including regulatory and internal compliance, custom
and practices, supervision, and fiduciary duties. 	He claims experience in pre-claim,
litigation, and arbitration support in cases involving standard of care, custom and
practice, and liability.
Despite these unchallenged qualifications, Merrill Lynch argues his
testimony should be excluded in full because his expert report offers improper legal
opinions about the annuity and trust accounts at issue, including an opinion about how
Merrill Lynch breached a fiduciary duty—one of the ultimate legal issues in the case.
It also asserts that his opinions, legal or otherwise, are wholly conclusory, without
supporting explanation, and based upon speculation and mischaracterizations of the
evidence to such an extent that the court should deem any testimony from him an
“unreliable nonsense opinion” that should be withheld from the jury.11
11 See Alaska Rent-A-Car, Inc. v. Avis Budget Grp., Inc., 738 F.3d 960, 969 (9th Cir. 2013)
(“Basically, the judge is supposed to screen the jury from unreliable nonsense opinions, but not exclude
opinions merely because they are impeachable.”).
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Snead v. Wright 	Case No. 3:19-cv-00092-JWS
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A. 	Legal Opinions
McConnell’s expert report is centered around the applicable duties owed
by Merrill Lynch to John H. Snead and the beneficiaries of the applicable trusts, and
whether any of Merrill Lynch’s actions at issue in this case “violated any duty,
appliable laws, internal policies, or customary practices.”12 He offers an opinion in his
report that Merrill Lynch owed John H. Snead and Plaintiffs a fiduciary duty and that
it breached that duty. 	He also concludes Merrill Lynch violated various SEC and
FINRA rules and regulations.
McConnell’s inclusion of these legal issues in his report does not require
that he be outright excluded from testifying at trial.13 Testimony that touches upon or
embraces an ultimate issue is not automatically objectionable. 	Indeed, the Ninth
Circuit specifically has held that testimony regarding whether “[d]efendants failed to
comport with industry standards” may be properly admitted at trial.14 The testimony
only becomes excludable when it includes an opinion on what legal conclusion should
be reached by the trier of fact.15
After due consideration of McConnell’s report, the court declines to
exclude his proposed testimony wholesale. McConnell must refrain from offering the
opinion included in his report that Merrill Lynch breached its fiduciary duties, because
that is a legal conclusion that encroaches on the job of the fact finder. 	He may,
12 Docket 135-1 at 2–3.
13 Mukhtar v. Cal. State Univ., Hayward, 299 F.3d 1053, 1065 n.10 (9th Cir. 2002) (“It is
well-established . . . that expert testimony concerning an ultimate issue is not per se improper.”).
14 Hangarter, 373 F.3d at 1016.
15 Id.
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Snead v. Wright 	Case No. 3:19-cv-00092-JWS
Order Granting Stipulation to Extend Deadline to File Dispositive Motions 	Page 6
however, offer testimony at trial to the extent his testimony can be narrowed to focus
on explaining the applicable industry standards and best practices garnered from his
experience in the industry and how Merrill Lynch’s actions and decisions failed to
comport with these standards and practices. 	He may offer opinions that touch on
various financial regulations, as long as he can articulate his understanding of what
each regulation requires based on his experience and why actions taken by Merrill
Lynch fall short of these requirements and expectations.
To the extent Merrill Lynch requests that this court parse through
McConnell’s report and specifically identify which statements would and would not
be admissible, the court declines to do so. 	The “report is not evidence and, because
the objectionable character of some of his statements may simply be due to injudicious
phrasing, a pre-trial ruling on the admissibility of his testimony is premature.” 16
Plaintiffs’ counsel, however, should caution McConnell that he cannot offer opinions
about the correct legal conclusion, nor can he opine as a legal expert. 	Additionally,
McConnell cannot testify, as his report suggests he might, about any potential money
laundering; any such testimony is beyond the scope of his expertise. 	His testimony
must be related to standards of care in the financial industry—based on custom, best
practices, company policies, or applicable regulations—as he understands them to
operate based on his years of experience. Any disagreement with his understanding of
those standards is the proper subject of cross-examination rather than exclusion.
16 Madrigal v. Allstate Indem. Co., CV-14-4242-SS, 2015 WL 12746232, at *5 (C.D. Cal.
Oct. 29, 2015).
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Snead v. Wright 	Case No. 3:19-cv-00092-JWS
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B. 	Reliability
Merrill Lynch also asserts that McConnell’s expert opinion testimony
should be excluded because it constitutes ipse dixit testimony—opinions offered
without supporting explanation and based upon speculation and mischaracterizations
of the evidence. In support, Merrill Lynch points to a dozen examples of statements
McConnell made in his report or deposition that it asserts are based on speculation or
erroneous facts, or are otherwise wholly conclusory opinions made without reference
to a specific policy, best practice, or regulation. 	After due consideration of Merrill
Lynch’s argument and McConnell’s report and deposition, the court cannot deem his
testimony wholly unreliable. 	As noted above, when testimony is not scientific or
technical, reliability rests less on an examination of the expert’s methodology or
application of relevant principals and more on consideration of the expert’s knowledge
and experience.17 McConnell has a sufficient foundation of knowledge and experience
to serve as an expert on standards of care in the financial services industry, and his
proposed testimony is not obviously wholly unreliable. 	To find that it is, the court
would have to conclude that his review of the evidence was erroneous or incomplete,
but questions about the facts supporting an expert’s opinions reflect on credibility, not
admissibility. 	That is, the court cannot decide whether McConnell’s opinions are
“right or wrong.” 18 	Rather, its task simply is to determine whether McConnell’s
17 Hangarter, 373 F.3d at 1017.
18 Elosu v. Middlefork Ranch Inc., 26 F.4th 1017, 1024 (9th Cir. 2022) (quoting Alaska Rent-
A-Car, Inc., 738 F.3d at 969–70).
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Snead v. Wright 	Case No. 3:19-cv-00092-JWS
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“testimony has substance such that it would be helpful to a jury.”19 Here, McConnell’s
qualifications are established and not challenged, and it is clear he reviewed the
evidentiary record. Therefore, his opinions about the applicable standards of care and
how they apply to the situation, which is included in his report to some extent, will be
helpful to the jury.
The court cautions, however, that McConnell may not testify solely to
construct a factual narrative for the jury.20 He may not simply present some theory of
the case favorable to Plaintiffs, particularly one that rests on speculation of malicious
motives and forgery. 	Any testimony that speculates as to motive, intent, or mental
state is not appropriate expert testimony and will be subject to objection and exclusion
at trial.21 Furthermore, for every opinion and conclusion offered about Merrill Lynch’s
conduct falling short of industry standards, McConnell must be able to identify and
explain the applicable industry standard.
V. 	CONCLUSION
Based on the preceding discussion, Merrill Lynch’s motion to exclude
the proposed expert testimony of Chris McConnell at docket 134 is DENIED. 	The
court will not exclude Chris McConnell from testifying under Rule 702 of the Federal
Rules of Evidence. Nothing in this order should be deemed a ruling on admissibility
of any specific statement contained in the report, and the court reserves the right to
19 Id.
20 Johns v. Bayer Corp., No. 09-cv-1935, 2013 WL 1498965, at *28 (S.D. Cal. Apr. 10, 2013).
21 See, e.g., Siring v. Oregon State Bd. of Higher Educ. ex rel. E. Oregon Univ., 927 F. Supp.
2d 1069, 1077–78 (D. Oregon 2013).
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Snead v. Wright 	Case No. 3:19-cv-00092-JWS
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exclude his testimony in the course of trial that exceeds the proper scope of his
expertise or is shown to be irrelevant or otherwise inadmissible based on the evidence
as presented at trial.
IT IS SO ORDERED this 7th day of September, 2022, at Anchorage,
Alaska.
/s/ John W. Sedwick
JOHN W. SEDWICK
Senior United States District Judge
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