In appraisal actions, expert witnesses are often retained by parties and serve very important roles in the determination of the value of a company’s shares. We recently highlighted a decision involving a “battle of the experts” in the context of a Delaware appraisal proceeding here.
In the course of discovery, parties are required pursuant to scheduling order to identify their expert witnesses to the other side. What happens if a party discloses their expert as a firm or company rather than as an individual person?
This very issue was addressed in the recent decision of the consolidated cases of In re Dole Food Co., Inc., Stockholder Litig., and In re Appraisal of Dole Food Company, Inc., C.A. Nos. 8703-VCL and 9079-VCL (Feb. 27, 2015). There, defendants identified a financial firm as its expert, not a particular individual working for the firm.
In this succinct opinion, Vice Chancellor Laster cites to various provisions of the Delaware Rules of Evidence in support of his holding that an expert must be a “biological person”. This is so because, for example, D.R.E. 602 requires that a witness must testify from “personal knowledge”, D.R.E. 703 contemplates an expert to perceive facts, and D.R.E. 603 requires an expert witness to take an oath.
The Court found that a corporation can do none of these things, and therefore held that a financial corporation as a whole could not serve as an expert witness. To avoid prejudicing defendants, however, the Court allowed the individual author of the expert report who worked for financial firm to instead serve as the expert witness.