Court rejects the damages calculation of Economic Damages Expert Witness but allows him to opine on available employment opportunities for the Plaintiff in Employment Discrimination Suit

Plaintiff Rose Kochka had brought claims against West Penn Allegheny Health System Inc. (“WPAHS”) under the Age Discrimination in Employment Act of 1967 (“ADEA”), 29 U.S.C. §§ 621, et seq., Pennsylvania Human Relations Act (“PHRA”), 43 P.S. §§ 951, et seq., and the Pittsburgh City Code, Article 5 §§ 651.01 et seq. These claims arose from Kochka’s past employment with WPAHS. In summary, Kochka contended that WPAHS had discriminated against her based on her age and had retaliated against her by terminating her for reporting alleged discrimination. The Court addressed seven motions in limine (six filed by Kochka and one filed by WPAHS), including Kochka’s Daubert motion to Preclude and/or Limit the testimony of WPAHS’ damages and mitigation expert Chad Staller.

Economic Damages Expert Witness

Chad L. Staller JD, MBA, MAC, CVA serves as the president of the Center for Forensic Economic Studies and holds extensive experience collaborating with both plaintiff and defense counsel across various civil cases. His expertise involves quantifying losses sustained by diverse plaintiff profiles, including union members, government employees, business proprietors, and injured children. Staller specializes in evaluating claims related to employment discrimination, encompassing calculations of back-pay, front-pay damages, and lost benefits. Additionally, he frequently provides consultation on commercial issues, analyzing claims associated with lost profits and business interruptions. Staller has a substantial record of testifying in jury trials, bench trials, and arbitrations within state and federal court settings.

Discussion by the Court

Kochka attempted to limit Andrea Campbell and Morgan Henderson’s testimony about their interactions with her and Beverly Feragotti, Kochka’s direct supervisor, claiming their involvement wasn’t relevant to her termination. However, the Court deemed their testimony crucial in understanding the reasons behind Kochka’s dismissal.

Kochka also tried to prevent Michael Weber, a Workforce Relations Consultant, from testifying, citing his testimony as hearsay based on a complaint from Campbell. The Court agreed, barring Weber’s testimony due to its hearsay nature.

Regarding Beverly Feragotti’s termination, Kochka argued against comparing her case to Feragotti’s, stating they were terminated by different decision-makers. WPAHS disagreed, asserting that despite differing roles, both faced similar performance standards and improvement plans. The Court confirmed their distinct positions and noted differences in their terminations, emphasizing separate decision-making groups involved in each case.

Ultimately, the Court highlighted the dissimilarities in roles, termination circumstances, and decision-makers, ruling Feragotti an unsuitable comparison for Kochka’s case.

Kochka filed a motion to preclude Chad Staller’s opinions, citing Rule 702 and the Daubert standard, alleging Staller’s methodology and data were unreliable. Specifically, Kochka objected to Staller’s use of Department of Labor statistics for calculating economic damages, his omission of adverse tax consequences, his qualifications and method for identifying employment opportunities for Kochka, and his reliance on the Pennsylvania Office of Unemployment Compensation to assess Kochka’s mitigation of damages. WPAHS defended Staller’s opinions, asserting their appropriateness in each aspect contested by Kochka.

The Court had agreed with Kochka regarding the unreliability of Chad Staller’s reliance on Bureau of Labor statistics to determine the duration of loss, thus rendering his calculation of economic damages based solely on these statistics unreliable as well. Staller’s reliance on the “Worker Displacement: 2019-2021” survey from the U.S. Census Bureau, which defined “Displaced Workers” as those affected by specific job loss scenarios, was found problematic.

Although Staller acknowledged the dissimilarity between Kochka’s employment separation and the survey’s definition of “Displaced Worker,” he justified the use of this data as a proxy due to the lack of a specific dataset for terminated employees like Kochka. The Court concurred with Kochka’s argument that as Kochka was terminated and did not align with the definition of a “Displaced Worker,” Staller’s reliance on data regarding non-terminated workers was inappropriate for determining the duration of loss for a terminated employee. Staller failed to provide a basis for using data applicable to non-terminated workers to assess a worker terminated for cause.

WPAHS attempted to argue for Staller’s opinion by asserting a seven-year mitigation period for Kochka from her separation in November 2019, suggesting that Staller’s analysis applied a three-year period from the time of his report. However, the Court rejected WPAHS’s argument, noting the misinterpretation of Kochka’s position and the lack of support for WPAHS’s claim in Staller’s report.

Staller’s reliance on Bureau of Labor statistics projecting a three-year period for displaced workers to achieve prior earnings parity contradicted WPAHS’s claim of a seven-year mitigation period. Staller’s report explicitly calculated the three-year period not from the May 2023 report date, as WPAHS asserted, but from January 1, 2024, the presumed date when Kochka would secure mitigation employment.

Consequently, the Court excluded Staller’s opinion on the duration of loss based on the “Worker Displacement: 2019-2021” survey and a three-year period. Staller’s economic damages calculation relying solely on Bureau of Labor statistics was also deemed unreliable. However, if Staller’s opinion on the duration of loss was supported by the human capital model (uncontested by Kochka), he could testify regarding his damages calculation during the trial.

The Court disagreed with Kochka’s contention that Chad Staller’s decision not to calculate potential adverse tax implications affected the clarity of his damages opinion or prejudiced Kochka. The Court clarified that it’s the responsibility of the district court, not the jury, to determine any additional compensation to offset the increased tax burden resulting from a back-pay award.

Given that the jury wouldn’t deliberate on this issue, the Court ruled that Staller’s omission of adverse tax calculations wouldn’t confuse the jury or cause prejudice to Kochka. As a result, this aspect of Kochka’s motion was denied by the Court.

The Court dismissed Kochka’s objection regarding Chad Staller’s qualifications and methodology for assessing available employment opportunities for Kochka. Despite Kochka’s challenge to Staller’s qualifications by highlighting his lack of vocational expertise and certification, a review of Staller’s curriculum vitae affirmed his qualification to provide an opinion in this regard.

Moreover, the Court found Staller’s methodology, utilizing employment listings from Forensic JobStats, to be reliable. Staller’s methodology was outlined in detail in his report, involving specific criteria such as keyword searches for relevant job titles and locations, along with subsequent exclusions based on these results after his deposition. The Court determined that Kochka’s objections were more related to the results of the methodology and Staller’s analysis rather than the methodology itself.

As WPAHS argued, the Court believed that Kochka’s concerns could be appropriately addressed through cross-examination and did not serve as grounds to exclude Staller’s opinions.

The Court agreed with Kochka’s objection concerning Chad Staller’s reliance on Pennsylvania’s unemployment compensation standards to assess Kochka’s mitigation efforts, deeming it confusing and inapplicable to this case. Staller’s reference to the Pennsylvania Office of Unemployment Compensation’s criteria for assessing job search diligence was found irrelevant as Kochka wasn’t seeking unemployment compensation in this lawsuit.

Despite WPAHS attempting to minimize Staller’s reliance on these standards, the Court found that Staller explicitly referenced and applied these standards to Kochka in his assessment. Staller’s report indicated that Kochka had not met the standard outlined by the Pennsylvania Office of Unemployment Compensation, forming the basis of Staller’s opinion that Kochka failed to conduct a reasonable job search and mitigate her damages.

As a result, the Court excluded aspects of Staller’s opinion that linked Kochka’s job search and mitigation efforts to the requirements of the Pennsylvania Office of Unemployment Compensation. However, Staller was permitted to testify about Kochka’s job search endeavors and the available employment opportunities.

In Kochka’s motion to exclude evidence of her failure to mitigate damages, her main contention was the exclusion of Chad Staller’s opinion testimony, the sole evidence, according to Kochka, that WPAHS possessed regarding mitigation. Kochka argued that since Staller’s testimony should be excluded, WPAHS lacked sufficient evidence to meet its burden, thus should be barred from arguing that Kochka failed to mitigate damages.

However, the Court denied Kochka’s motion, finding her reasoning insufficient. The Court concluded that Kochka hadn’t provided compelling reasons to prevent WPAHS from presenting evidence concerning her efforts to mitigate damages. Consequently, WPAHS was not precluded from introducing such evidence or making arguments regarding Kochka’s mitigation efforts.

Kochka moved to preclude deposition testimony that had been designated by WPAHS, specifically related to Andrea Campbell, who was listed as witness to be called on both Kochka’s and WPAHS’ witness lists. Since Campbell was set to provide live testimony, the Court granted Kochka’s motion to preclude the deposition testimony without prejudice.

WPAHS moved to exclude evidence and testimony involving Julie Stuck, a Labor Relations Consultant, and drafts of Kochka’s termination letter. Stuck was consulted for an HR perspective on the termination. WPAHS argued that these pieces of evidence held limited probative value since Stuck wasn’t a decision-maker and the initial and final termination letters aligned. Additionally, WPAHS expressed concern about potential unfair prejudice due to a statement by Stuck mentioning an EEOC claim.

However, the Court disagreed with WPAHS, affirming the significant probative value of the draft termination letters and communications involving Stuck. The Court ruled that the EEOC reference by Stuck, while potentially prejudicial, didn’t substantially outweigh its probative value concerning the termination process. Therefore, the Court allowed the inclusion of this evidence and testimony.

WPAHS requested permission to amend the Joint Exhibit List, adding Exhibits 2, 4, 5, 6, and 7, previously attached to its Motion in Limine. WPAHS sought admission of all communications related to the topic, not initially included in the parties’ Joint Exhibit List. Kochka didn’t oppose the inclusion of Exhibits 2, 5, 6, and 7 but objected to Exhibit 4.

Kochka argued against Exhibit 4’s relevance, stating that the email text was duplicated in other emails, and the 27 pages of attachments lacked independent relevance. Kochka also pointed out the absence of evidence showing Stuck’s review or reliance on the attachment contents.

The Court approved the motion partially, allowing admission of Exhibits 2, 5, 6, and 7, unopposed by Kochka. However, the Court deferred its ruling on Exhibit 4, which was opposed, pending further consideration.

To sum it up, the Court granted in part and denied in part WPAS’ motion to exclude evidence and testimony involving Julie Stuck.

Held

• Plaintiff’s Motion in Limine #1 – To Limit the Testimony of Andrea Campbell and Morgan Henderson was denied by the Court.
• Plaintiff’s Motion in Limine #2 – To Preclude the Testimony of Michael Weber was granted by the Court.
•  Plaintiff’s Motion in Limine #3 – To Preclude Evidence or Argument Regarding Beverly Feragotti’s Termination was granted by the Court.
• The Plaintiff’s Daubert Motion aimed at limiting or precluding Chad Staller’s testimony has been partially granted and partially denied. Firstly, Staller is barred from testifying regarding his opinion on the duration of loss if it relies on the “Worker Displacement: 2019-2021” survey. Additionally, if Staller’s calculation of economic damages is solely based on Bureau of Labor statistics, it is deemed unreliable and excluded. However, if his opinion on the duration of loss aligns with support from the human capital model (not challenged by Kochka), Staller is permitted to testify about his damages calculation during the trial. Secondly, Staller is not allowed to testify that the job search requirements set by the Pennsylvania Office of Unemployment Compensation represent the standard for Kochka’s reasonable and diligent job search or mitigation of damages. Nor can he testify that Kochka lacked reasonable diligence by failing to meet these requirements. Nonetheless, Staller retains the ability to testify regarding Ms. Kochka’s job search efforts and the available employment opportunities.
• Plaintiff’s Motion in Limine #4 – To Preclude Evidence or Argument that Plaintiff Failed to Mitigate Her Damages was denied by the Court.
•  Plaintiffs’ Motion in Limine #5 – To Preclude Defendant’s Discovery Designations was granted without prejudice by the Court.
•  Defendant’s Motion in Limine #1 – To Exclude Evidence and Testimony Relating to Julie Stuck and Drafts of Plaintiff’s Termination Letter was granted in part and denied in part by the Court.

Key Takeaways

The Court excluded testimony from the Defendant’s expert witness Chad Staller regarding the duration of the Plaintiff’s loss of earnings, to the extent it relied solely on Bureau of Labor statistics about displaced workers. The Court found that since the Plaintiff was terminated for cause, rather than displaced, the statistics were not sufficiently reliable. The Court also excluded Staller’s opinions applying the standard for unemployment compensation in Pennsylvania to determine if the Plaintiff failed to mitigate damages. The Court found this would confuse the jury since the Plaintiff was not actually seeking unemployment compensation. However, the Court allowed Staller to testify about the Plaintiff’s job search efforts and employment opportunities available to her. Additionally, the Court rejected a challenge to Staller’s failure to provide calculations for adverse tax consequences, finding this issue was not for the jury. Overall, the Court demonstrated a willingness to closely scrutinize the reliability of the Defendant’s expert’s methodology and data underpinning his opinions about mitigation and damages, while still allowing him to testify on certain relevant issues like job search efforts. The Court applied the Daubert principles to ensure the expert’s testimony would assist rather than confuse or mislead the jury.