Economics Expert’s Lack of Specialized Credentials Did Not Provide a Basis for Exclusion
Posted on July 15, 2025 by Expert Witness Profiler
Plaintiff Michael Ruiz (“Ruiz”) is suing his former employer, Defendant Magellan Financial & Insurance Services (“Magellan”), under the theory that his alleged demotion and subsequent termination were due to his race and national origin and that he was also subjected to a hostile work environment.
Ruiz retained an expert, Michael J. Stokes (“Stokes”) of Beta Business Consulting LLC (“Beta”), to calculate the net present value of his lost wages and benefits. Magellan, however, filed a motion to exclude the expert testimony of Stokes.
Economics Expert Witness
Michael J. Stokes earned an MBA from the Isenberg School of Management at the University of Massachusetts Amherst with a focus in entrepreneurship. He has been employed as a litigation-related economic expert for 6 years at Beta Consulting.
Discussion by the Court
Qualifications
Magellan argued that Stokes is unqualified because “his financial or accounting training concerned issues related to capital and corporate investment, and no other topics” and “he has no other certifications or licenses, and no publication history.”
Analysis
The Court held that Stokes is qualified to offer opinions about the net present value of Ruiz’s purportedly lost wages and benefits. First, Stokes’ opinions are “within the reasonable confines of his subject area.” Stokes holds an MBA from the University of Massachusetts, where he took classes on management, supply-chain management, entrepreneurship, finance, and basic economics.
As for the “finance and accounting” portion of his studies, Stokes studied “[a]nything from investment to just looking at capital investment, corporate investment.” These areas of study appear to encompass the opinions set forth in the report. Although Magellan may be correct that Stokes’ credentials are not highly specialized, the absence of specialization goes to the weight of Stokes’ testimony and did not provide a basis for exclusion.
Second, Stokes’ experience also forms part of the basis for his qualification to testify as an expert. Stokes is an “economic analyst” for Beta, where he has worked since 2018, and is now the full owner of the company. Before assuming ownership, Stokes was trained by the founder and previous owner, Larry Stokes (his father), who has a Ph.D. in economics. In addition to being trained and advised by his father, Stokes “occasionally reviews” trainings from the National Association of Forensic Economics (“NAFE”), a standards-setting association for forensic economists of which he is a member.
Relevance
Magellan next argued that Stokes’ testimony is not relevant because it does not consider the relevant factors in an economic damages calculation “such as back pay or mitigation” and only “seeks to estimate what [Ruiz] might have earned from Magellan had he not been terminated.”
Analysis
Stokes’ report purported to calculate the net present value—$3,729,078—of the wages and benefits Ruiz would have earned had he remained employed by Magellan until his retirement. Although this figure likely overstated Ruiz’s economic damages, as it made no attempt to account for offsets and mitigation, it was still at least one piece of the puzzle.
Magellan contended that even if relevant, Stokes’ testimony would be confusing, misleading, and/or prejudicial because Ruiz “claimed that Stokes’ calculation represents his damages.” In essence, Magellan argued that a jury would be confused by the difference between Stokes’ economic earnings projection and “economic damages,” which are calculated by incorporating a variety of figures, including mitigation. The problem with this argument is that although Ruiz has at times during this case appeared to characterize the report as showing his economic “damages,” the report itself did not purport to calculate Ruiz’s litigation damages and Stokes did not suggest as much in his deposition. In fact, he clearly stated the opposite.
Moreover, Ruiz clarified in his response brief that the report did not purport to establish his damages and will simply “be helpful to the jury to determine [Ruiz’s] damages.”
As a result, the Court will not categorically exclude Stokes’ opinions before trial based on Rule 403.
Reliability
Magellan’s final argument for exclusion is that “Stokes’ opinion is not reliable because it did not comply with his own assumptions.” Specifically, Magellan contended that Stokes “assumed that generally an employee’s earnings peak mid-career, and then ‘tend to’ decline toward the end of the employee’s working life.” The opinion that Stokes offered, however, assumed that [Ruiz’s] earnings would continue to increase through the end of his working life.
Analysis
The Court held that Magellan’s reliability-based arguments did not provide a basis for exclusion because the report is based on clear and accessible data, including Ruiz’s responses to a questionnaire, Ruiz’s W-2s from 2018-2023, publicly available government data, and scholarly research—all of which Stokes disclosed throughout the report.
In each section of the report, Stokes also explained his methodological approach. By disclosing his methodology and the data on which his analysis relies, Stokes’ calculations may be retested, refined, and challenged. This ability to be tested—also known as falsifiability—is a hallmark of the scientific method and a factor that courts may consider in testing for reliability.
Additionally, the Court is sufficiently convinced that Stokes’ methods are “generally accepted in the scientific community.” The record indicated that Stokes devised his methods in compliance with NAFE, a professional standards-setting organization for forensic economists.
Magellan argued that Stokes’ approach is unreliable because he failed to adhere to his own assumption by not lowering Ruiz’s projected wages closer to retirement. However, Stokes merely stated that a late-career decrease in earnings “often tends” to occur but that this tendency “is affected by a worker’s age, sex and level of educational attainment.” Given these caveats and qualifications, there was nothing inherently contradictory and unreliable in Stokes’ decision to assume that Ruiz’s earnings would not decrease over time.
For the same reasons, exclusion is not warranted based on Magellan’s contention that Stokes relied on other “unreliable assumptions.” As an initial matter, Stokes’ decision to use industry averages of similarly situated persons to quantify Ruiz’s projected health and retirement benefits, instead of basing the calculation on Ruiz’s actual health and retirement benefits, is not clearly unreliable. Magellan offered no authority suggesting that such an assumption is per se unreliable.
Held
The Court denied Magellan’s motion to exclude the testimony of Plaintiff’s expert Michael J. Stokes.
Key Takeaway:
Although an expert’s “failure to follow his own general practice” is a methodological flaw that may provide a basis for exclusion, the Court is not persuaded that Stokes engaged in such a failure here. Stokes merely stated that a late-career decrease in earnings “often tends” to occur but that this tendency “is affected by a worker’s age, sex and level of educational attainment.”
Case Details:
| Case Caption: | Ruiz V. Magellan Financial & Insurance Services |
| Docket Number: | 2:23cv2090 |
| Court Name: | United States District Court, Arizona |
| Order Date: | July 10, 2025 |
