Shaida Horner

Law & Valuation
Professor Palmiter
Spring, 1999

Text of Paper


The prevalence of expert testimony in cases involving business valuation has led the Supreme Court to offer guidance on the issue of expert admissibility in two cases, Daubert v. Merrell Dow Pharmaceuticals, Inc. and Kumho Tire Co. v. Carmichael.

Do the factors set out in Daubert v. Merrell Dow Pharmaceuticals, Inc. apply solely to scientific expert testimony?
No, as the Supreme Court held in Kumho Tire Co. v. Carmichael that trial judges have the discretion to apply the factors to either scientific or non-scientific expert testimony, both with regard to whether the person is qualified to testify as an expert and whether the testimony is reasonable in light of the circumstances of the case.
In Daubert, the Supreme Court set standards that trial judges must use to assess whether expert testimony should be heard.  However, these factors dealt solely with scientific testimony.  This led to much confusion as to whether these factors applied to non-scientific testimony as well.  The Supreme Court granted certiorari to Kumho in order to address this confusion.  The Court stated that Daubert only referred to scientific knowledge because that is what had been at issue.  However, they chose to expand Daubert to include other expert testimony based on a reading of Federal Rules of Evidence 702 and 703, which do not distinguish between scientific and other specialized knowledge.  Also, the Court felt that attempting to draw a clear line between scientific and non-scientific knowledge could prove difficult, and that both essentially required the same reliable criteria for proof of expert status.  The Court also stated that the trial judges examine the circumstances of the case in order to decide if the Daubert factors should be applied to the expert’s testimony, thus giving trial judges’ flexibility when determining what expert testimony is admissible, both with regard to the credentials of the expert and the underlying theory supporting the expert’s testimony.

After Kumho, the Daubert factors are now applicable to professionals such as business valuators who are called on to testify in a case.  Thus, they may no longer escape the scrutiny of the court by claiming their opinions are supported through experience rather than data, as could be done before Kumho.  Also, as the trial judge now has flexible discretion to determine whether the valuator is both qualified to testify and whether the actual testimony is reasonable in light of the circumstances of the case, the valuator must be prepared to support his testimony with the underlying methodology.

This decision also has implications with regard to juries.  First, the jury will rely on the judge having fulfilled his “gatekeeper” role, and therefore will be more accepting of expert testimony.  Second, it also decreases the chance of the jury being present to hear testimony which will eventually be rendered inadmissible.

One positive result of this case may be the requirement of knowledgeable experts, which may lead to a decline in the number of people offering testimony for hire, which will have a strong impact in the business world. There are some negative aspects to this decision as well, with regard to those wanting to testify regarding non-scientific information.  First, it may become more difficult to qualify as an expert.  However, it could also go the opposite way, in that the judge does not need to follow any hard-and-fast rules.  Also, as this decision applies only to federal courts, there may be an influx of cases involving questionable expert testimony to state courts.  However, many state courts have chosen to follow Daubert and will probably do the same with Kumho.

The world of business valuation has been plagued with a rapid proliferation of various professionals anxious to play the game of granting something value.  The combination of this influx of participants and the ambivalent judicial rules applicable to experts and their testimony has created an environment ultimately producing expert testimony that is less than helpful to judges and juries.  However, a recent Supreme Court decision may assist the valuation profession make sense of seemingly contradictory decisions issued by various federal courts throughout the country within the past decade.  Six years ago, the Supreme Court offered guidance on the issue of expert admissibility in Daubert v. Merrell Dow Pharmaceuticals, Inc.[1]  (Daubert).  Recently, the Supreme Court expanded on its holding in Daubert in Kumho Tire Co. v. Carmichael[2]  (Kumho Tire) by holding that a trial judge’s “gatekeeping” function on admissibility of scientific expert testimony also applies to testimony based on technical and other specialized knowledge, even if the testimony is only based on experience.[3] This Note will discuss the Kumho Tire case in Part II and will analyze the implications of the Kumho Tire decision for the business valuator in Part III.  The Note will conclude in by discussing the business of being an expert in the emerging Kumho Tire era in Part IV.
The Case
Kumho Tire, a products liability case, involved a tire blowout on a minivan, resulting in the death of one passenger and serious injury to several others.[4]  An expert witness planned to testify to the tire’s defectiveness, but a federal district court judge refused to admit the testimony based on doubts as to whether the witness’s test methods could reliably determine the cause of the blowout.[5] This lower court decision was later reversed by the Eleventh Circuit Court of Appeals, which held that rules for scientific experts do not apply to non-scientific experts.[6]
This decision by the Eleventh Circuit Court of Appeals indicated to the Supreme Court that further guidance was necessary in the area of admissibility of expert testimony.  While two other major rulings had been made by the Supreme Court in this area over the past decade, the decision in Kumho Tire substantially clarifies the limits on expert testimony by expanding upon the Daubert decision.[7]  In Daubert, the Supreme Court set standards that trial judges must use to assess whether expert testimony should be heard.[8]  These standards included determining whether the reasoning on which the testimony is based is scientifically sound and whether the reasoning and methodology are relevant to the facts of the particular case.[9]  The Supreme Court set forth four specific factors which might prove helpful in determining the reliability of a particular scientific theory or technique.[10]  These factors are:

Whether the theory or technique can be, or has been, tested,[11]
Whether the theory or technique has been subjected to peer review and publication,[12]
Whether the technique has a known or potential rate of error[13] and
Whether the technique has “general acceptance” in the relevant community.[14]

Because Daubert addressed only scientific experts, it created confusion over the standards applicable to the admission of testimony presented by a nonscientific expert witness, such as an engineer or a business valuator.
While the Supreme Court addressed the Eleventh Circuit Court of Appeal’s decision regarding whether the Daubert factors apply to non-scientific testimony, the decision resolves a split among lower courts in the application of the Daubert analysis.  Some lower court judges often excluded nonscientific evidence based on Daubert’s four factors in weighing the reliability of nonscientific evidence.[15]  Other lower court judges generally included nonscientific testimony and refused to apply the Daubert test for admissibility altogether.[16]  To add to the confusion of whether to apply the Daubert test, a loophole in the Daubert decision eventually emerged indicating that the Daubert test for admissibility of expert testimony could be sidestepped anytime the expert invoked experience as a basis for the testimony.[17]

In Kumho Tire, the court squarely addressed whether the Daubert factors should be considered in relation to non-scientific expert testimony, while simultaneously closing the loophole on the inapplicability of the Daubert factors to those basing their testimony on experience and training.[18]  In a unanimous decision written by Justice Stephen G. Breyer, the Kumho Tire Court first considered the Federal Rules of Evidence in its opinion. The Court reasoned that Daubert referred only to “scientific” knowledge because that was the particular nature of the expertise at issue before the Court.  The Court first analyzed Rule 702, Testimony by Experts, which states:

If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise.

The Court supplemented Rule 702 by analyzing Rule 703, Bases of Opinion Testimony by Experts, which states:
The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing.  If of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence.
Taking these two Rules of Evidence into account, the Kumho Tire Court reasoned that Rule 702 does not distinguish between “scientific” knowledge and “technical” or “other specialized” knowledge, but the Rule is clear that any such knowledge may become the subject of expert testimony. Basically, it is the Rule’s word “knowledge,” not words such as “scientific” that modify the word knowledge, that establishes a standard of evidentiary reliability.  Furthermore, the Court supported this determination by adding that Rules 702 and 703 grant all experts, not just “scientific” experts, testimonial latitude unavailable to other witnesses on the premise that the expert’s opinion will have a reliable foundation in the knowledge and experience of his discipline.  Therefore, the Court reasoned that the evidentiary rationale underlying Daubert’s “gatekeeping” determination was not exclusively limited to “scientific” knowledge.
In overturning the Eleventh Circuit’s holding that Daubert only applies to scientific evidence, the Kumho Tire decision also addressed the Court’s prior holding in Daubert.[19]  The Supreme Court stated that no clear line divides scientific from nonscientific knowledge and “conceptual efforts to distinguish the two are unlikely to produce clear legal lines capable of application in particular cases.”[20]  Therefore, expert testimony essentially requires the same reliable criteria for proof of expert status for scientists as well as nonscientists.[21]

A provocative argument the plaintiff in Kumho Tire made was that expert trial court judges possessing the expertise to determine the appropriateness of not only scientific evidence, but other specialized testimony, such as statistics, was unrealistic.[22]  However, the Court countered this argument by stating it would be even more unrealistic to expect a jury of laypersons to evaluate the pertinence of expert testimony.[23]  Therefore, the Court concluded a judge would be in the best position to request additional information to determine whether the expert’s testimony meets the factors set forth in Daubert.[24]

The Supreme Court further clarified the Daubert decision by offering trial judges guidance in deciding when the Daubert factors may assist the court in determining the reliability of expert testimony.  The Court stated that “[t]he conclusion, in our view, is that we can neither rule out, nor rule in, for all cases and for all time the applicability of the factors mentioned in Daubert.  Too much depends upon the particular circumstances of the particular case at issue.”  Therefore, even if an expert’s qualifications are not in doubt, trial judges still have discretion to apply the Daubert factors to the actual testimony.[25]  The Court clarified that the issue is not whether the expert’s testimony is reasonable in general, but whether the methodology is reasonable in light of the facts and circumstances to which the expert testimony is directly relevant.[26]  The Supreme Court stressed in the Kumho Tire decision, however, that judges should only use the Daubert factors when “reasonable,” even when considering scientific testimony.[27]

In his concurrence, Justice Antonin Scalia stated that the point of the judge’s discretion is to exclude “expertise that is fausse and science that is junky.”[28]  While the justices emphasized that the test of reliability is a flexible one, they added that the list of specific factors in the Daubert case “neither necessarily nor exclusively applies to all experts or in every case.”[29]  Based on this statement, it is clear that trial judges require flexibility to keep all kinds of unreliable witnesses from testifying.[30]

The Supreme Court also stated that trial judges may exercise the same level of discretion in determining the expert’s reliability as they have in determining whether the testimony is ultimately reliable.[31]  Both of these decisions, the Supreme Court held, are reviewable only for abuse of discretion.[32]  Therefore, the objective of the requirement set forth in Kumho Tire is to ensure the reliability and relevancy of expert testimony.[33]  This requirement is also to assure that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual stringency that characterizes the practice of an expert in the relevant field.[34]

Implications For The Business Valuator
Many attorneys are praising the Supreme Court for having carefully crafted the Kumho Tire decision to apply not just to the credentials of the expert, but also to the underlying theory supporting the expert’s testimony.[35]  Basically, admissibility of expert testimony is based on what the expert is saying and, even more critical, how this testimony applies to the specific case at hand.[36]  Hence, it is clear after the Kumho Tire decision that the Daubert factors are applicable to professionals such as business valuators,[37] as well as individuals basing their testimony solely on experience. Therefore, business valuators may no longer escape the scrutiny of the court by merely professing their opinions are supported through experience rather than data as they did during the pre-Kumho era.
Additionally, because the decision grants district court judges significant discretion in determining both whether the business valuator is qualified to testify as an expert and whether the actual testimony and methodology employed by the expert is reasonable in light of the facts and circumstances of the case,[38] the valuator should understand the judge well.[39] The Supreme Court clarifies the Daubert decision in Kumho Tire by stating that the reasonableness of the testimony will be determined by the judge in light of the particular facts and circumstances to which the expert testimony is directly relevant.  Therefore, a business valuator blindly utilizing a historical weighted average of earnings to project future earnings, while a valid method in and of itself, would not be allowed to employ this method in valuing a rapidly growing company under the auspices of a gatekeeping judge.  Taking this guidance into account, the business valuator must be prepared to support his testimony with the methodology utilized in arriving at his conclusion in light of what the valuator knows to expect from the particular judge and his grounded knowledge in the field of valuation.  Furthermore, a business valuator advocating an unreasonable position may essentially force the judge to render his testimony inadmissible, a ruling which is often not successfully reversed on appeal under the stringent abuse of discretion requirement.
Even more beneficial in this regard from the juror standpoint is that the Kumho Tire ruling will mean hearing and sorting through dubious theories will not be necessary. Essentially, juries may rely on the validity of the expert testimony and evidence offered based on the judge having fulfilled his role as “gatekeeper,” a position important and beneficial for the judge to have for precisely this reason.[40] In fact, aside from confirming that judges are the “gatekeepers,” the Kumho Tire decision indicated judges were the most logical choice for this role as they may request additional information from the expert.
The decision also reinforces the maxim that fact-finding in litigation should be based on reliable technical work, not speculation,[41] highlighting the importance that the quality of the evidence courts hear should be no less than what professionals hear in their own discipline.[42]  Furthermore, the Kumho Tire decision will also allow attorneys to challenge the expertise of a witness out of sight of the jury and, in many cases, before a trial begins,[43] eliminating concern over whether the jury has been influenced by testimony which eventually proves to be inadmissible.

Potentially negative effects of the Kumho Tire decision are three-fold.  First, some legal experts ascertain the Kumho Tire decision will make it more difficult to qualify as an expert.[44]  Second, many legal commentators believe an effect of the decision may be to discourage federal district court judges from accepting testimony that is considered innovative.[45]  Third, because the Kumho Tire decision provides guidance to federal courts, many believe the state courts will receive a tremendous influx of cases involving questionable expert testimony.

In addressing the first and second concerns regarding the potential difficulty of qualifying as an expert witness and the danger of excluding innovative testimony, many argue that the Supreme Court is, instead, facilitating the qualification of an expert and the related testimony.  By allowing the judges considerable leeway in considering expert credentials, the Court is essentially rejecting a more rigid approach used by many lower court judges after the Daubert decision.[46] The Kumho Tire ruling gives trial judges broad discretion to decide what constitutes sound, relevant expert testimony.[47]  Because no hard-and-fast rules are required to be implemented, a “tire engineer . . . does not have to have a Ph.D. in polymer science or have published articles on tire engineering in scholarly journals” when called to testify.[48]  All that is required is that this individual has experience and knowledge in the field.[49]  However, the justices stated that trial judges should give equally tough scrutiny to experts who apply their general expertise to technical fields,[50] suggesting that even when a pure experience-based witness testifies, it may be useful for the judge to make inquiries regarding the general acceptance of his method.[51]

In addressing the third concern in more detail, many tort reform advocates believe the Kumho Tire ruling could increase the number of suits brought in state courts that lack similar limits enumerated in Kumho Tire.[52]  The decision, many believe, increases the drive for plaintiff’s attorneys to get their cases into state court.  To avoid federal removal, attorneys will name defendants against whom they do not expect to enforce judgment, such as the local distributor of a national company’s product, as a means of avoiding federal jurisdiction.[53]  However, given that state courts have applied the Daubert factors in the past, it is doubtful that they will not apply Kumho Tire to these cases as well.

Others believe that resorting to state courts is not a danger, as most state rules of civil procedure have provisions which are susceptible to the same analysis the Supreme Court implemented in Kumho Tire.  More likely is the fact that the Kumho Tire decision will be used by defendants in state court trials to argue against the admissibility of certain expert testimony.[54]  As Daubert has been cited by several state supreme courts in limiting the admissibility of untested scientific evidence, states will also adopt the precedent in Kumho Tire and expand the protection given businesses from frivolous suits in their courts.[55]  Therefore, state courtrooms may not easily be manipulated into a forum in which business valuators may offer unreasonable opinions as to the value of a particular entity, item or damage calculation.


Kumho Tire And The Business Of Being An Expert
Another implication of the Kumho Tire decision, though not directly addressed in the decision, is its effect on the “business of being an expert witness.”  The confusion over the application of Daubert has not been the only complication relating to expert testimony during the course of the past decade.  Part of the problem has been the proliferation of experts of all kinds.  For example, a 1998 legal directory has listings for hundreds of experts willing to testify, including everything from experts on “bicycle accidents to Window Doctor Ltd., whose advertisement claims, ‘If your window is feeling sick, we can fix it extra quick.’”[56]  Essentially, this “readily available off-the-shelf testimony”[57] has become big business and is proliferating at an unrestrained pace.  No longer is it necessary to search for experts in the laboratory or in the field, which are places where Daubert suggests true scientific expertise is developed.[58]  Essentially, the Kumho Tire decision will lead to more rational decision making regarding the standards for expert witnesses and will be closely policed by the courts.  As a result of the Kumho Tire decision, the district court judges will also have new authority to “reduce some of the dueling expert testimony by assuring that only fully qualified experts are actually able to put their testimony before the court.”[59]  Essentially, to the extent to which use of expert witnesses has become “an assembly-line process,”[60] the Court in Kumho Tire has forcibly returned expert testimony to a “point at which knowledgeable craftsmen are once again required.”[61]  Therefore, testimony from “hired-guns” in the world of business valuation will diminish in the courtrooms and only that testimony which will lead to more rational decision-making will ultimately be admitted.

In conclusion, with America approaching the greatest transfer of wealth in history,[62] the impending threat of Year 2000 litigation and the rapid increase in areas of litigation in which valuation experts are necessary, the decision in Kumho Tire is invaluable in providing guidance to business valuators.

First, it is now clear that the Daubert factors are applicable to professionals such as business valuators, as well as individuals basing their testimony solely on experience. Second, because the decision grants district court judges significant discretion in determining both whether the business valuator is qualified to testify as an expert and whether the actual testimony and methodology employed by the expert is reasonable in light of the facts and circumstances of the case,[63] the valuator should understand the judge well.[64] Finally, although the Kumho Tire decision is within the federal realm, state courts will, more than likely, consider the decision as many state Rule of Evidence closely reflect the Federal Rules of Evidence.  It is only through the consideration of all these factors that a business valuator may effectively serve his client in a competent manner.


[1]   Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993).
[2] Kumho Tire Co. v. Carmichael, 119 S.Ct. 1167 (1999).
[3] The opinion grants federal judges new authority in applying the Daubert test to all expert witnesses, such as engineers, handwriting analysts, economist and even gardners, to determine whether the testimony is reliable. See Scott Goldstein, U.S. Justices Amplify Guidelines On Expert Testimony, 8 N.J. Law.: Wkly. Newspaper 5, Mar. 29, 1999.
[4] Kumho Tire, 119 S.Ct. at 1172.
[5] Id. at 1173.
[6] Id. at 1173.
[7] In addition to Daubert, the third ruling was the Supreme Court’s 1997 decision in General Electric Co. v. Joiner (Joiner), clarifying federal district courts, not federal appellate courts, are obligated to screen the admissibility of scientific evidence.  Joiner was also notable for its holding that “nothing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence that is connected to existing data only by the ipse dixit of the expert.  A court may conclude that there is too great an analytical gap between the data and the opinion proffered.” General Electric Co. v. Joiner, 118 U.S. 512 (1997); see alsoCourt Trashes Junk Science, Bus. Ins., Mar. 29, 1999 at 8.  Therefore, even a well-qualified expert is not automatically assured that his opinion is admissible.  If the opinion is ultimately challenged, the opinion’s reliability, trustworthiness and underlying methodology must also be shown.  See Michael Hoenig, Screening of Experts Is Strengthened, 221 N.Y.L.J. No. 68 Apr. 12, 1999 at 3.
[8] The trial judge also must determine at the outset whether the expert is proposing to testify to scientific knowledge that will assist the trier of fact to understand or determine a fact in issue. Daubert, 509 U.S. at 592.
[9] Daubert, 509 U.S. at 593.
[10] Daubert, 509 U.S. at 593-94.
[11] The Daubert Court states “[s]cientific methodology today is based on generating hypothesis and testing them to see if they can be falsified; indeed, this methodology is what distinguishes science from other fields of human inquiry.”  The Court further elaborated on the testing factor by stating, “[t]he statements constituting a scientific explanation must be capable of empirical test.”  Daubert, 509 U.S. at 593.
[12] The Court states that publication, which is but one element of peer review, is not a sine qua non of admissibility; it does not necessarily correlate with reliability.  The Court further noted that in some instances, well-grounded but innovative theories will not have been published and that some propositions are too particular, too new, or of too limited interest to be published.  The Court stressed that submission to the scrutiny of the scientific community is a component of “good science,” in part because it increases the likelihood that substantive flaws in methodology will be detected.  The Court concluded that the fact of publication, or lack thereof, in a peer review journal thus will be a relevant, though not dispositive, consideration in assessing the scientific validity of a particular technique or methodology on which an opinion is premised. Id. at 593-94.
[13] The Court ordinarily should consider the known or potential rate of error and the existence and maintenance of standards controlling the technique’s operation.  Id. at 594.
[14] The Court stated “a reliability assessment does not require, although it does permit, explicit identification of a relevant scientific community and an express determination of a particular degree of acceptance within that community.”  Id.
[15] The Second Circuit notably screened non-scientific experts vigorously by applying the Daubert factors; see Marcia Coyle, ‘Kumho Tire’ Clarifies Use Of ‘Daubert’: Supreme Court Says Case Is Not Limited To Scientific Testimony, Nat’l L.J. Apr. 5, 1999 at B1; see also Hoenig, supra note 7, at 3.
[16] For example, see Compton v. Subaru of America, Inc. discussed in the footnote below.  Also, despite Daubert, Joiner, supra note 7, and a clearly defined trend in most circuits to eliminate unreliable testimony, some circuits nevertheless preferred to interpret Daubert’s gatekeeping mandate more restrictively and viewed liberal admissibility criteria and broad language in the Federal Rules of Evidence as the norm and vigorous screening of the expert as the exception; see Coyle, supra note 15, at B1; see also Hoenig, supra note 7, at 3.
[17] In Compton v. Subaru of America Inc. the Tenth Circuit held when an expert bases his opinion solely on experience and training, application if the Daubert factors was unwarranted.  The reasoning was that the expert’s opinion merely drew upon his 22 years of “experience” and that the Daubert factors “simply had little bearing” on his testimony. Compton v. Subaru of America Inc., 82 F3d 1513, 1516 (10th Cir.), cert. Den’d, 117 S. Ct. 611 (1996). See also Coyle, supra note 15, at B1; see also Hoenig, supra note 7, at 3.
[18] Kumho Tire, 119 S.Ct. at 1176.
[19] The Eleventh Circuit held that the witness could offer his opinion, based only on his experience and training, and did not have to explain his reasoning or the methodology for reaching that opinion.  Supreme Court Upholds Strict Guidelines, Chemical Mkt. Rep. Mar. 29, 1999 at 5(1).
[20] Kumho Tire, 119 S.Ct. at 1174.
[21] Steven Brostoff, Insurers Praise U.S. Supreme Court For Giving Judges Power On ‘Expert’ Testimony, Nat’l Underwriter Prop. & Casualty-Risk & Ben. Mgmt. Mar. 29, 1999.
[22] Id.
[23] Id.
[24] Id.
[25] Id.
[26] Id.
[27] Kumho Tire, 119 S.Ct. at 1176; See Goldstein, supra note 3, at 5.
[28] The word “fausse” is French and means twisted. Kumho Tire, 119 S.Ct. at 1179.
[29] Jan Crawford Greenburg,   Justices Set Down Standards On Experts Ruling May Help Companies Defeat Product Liability Suits, Chi. Trib. 1 Mar. 24, 1999.
[30] Ron Lent, Supreme Court Authorizes Scrutiny Of Expert Testimony, J. Com. Abstracts Mar. 31, 1999 at 12A.
[31] Kumho Tire, 119 S.Ct. at 1175-76.
[32] Id. at 1171.
[33] Supreme Court Expands Gatekeeper Role On Expert Testimony, 14 Liab. Wk. Mar. 29, 1999 at 13.
[34] Kumho Tire, 119 S.Ct. at 1176.
[35] Brostoff, supra note 21.
[36] Id.
[37] Some federal court cases have disqualified business valuators based on the Daubert factors.  In Target Market Publishing, Inc. v. ADVO, Inc., 136 F.3d 1139 (7th Cir. 1998), the Court excluded the business appraiser’s report under Daubert because the report was “based upon assumptions that did not legitimately support the conclusion.”  Therefore, even before guidance provided by Kumho Tire, the Seventh Circuit was already considering whether the actual methodology employed by the expert was reasonable in light of the facts and circumstances of the case.  In another federal case, G.T. Laboratories v. The Cooper Companies, 1998 WL 704302 (N.D.I11.), the district court excluded a business valuator as an expert because he used an “alternative” method of calculating lost profits and not the “traditional” and “common” method.  The business valuator, under his own admission, also stated he did not consider variable costs under this alternative methodology.
[38] Many believe that district judges may not be as impartial as the Supreme Court believes they will be.   See Mark A. Hofmann, Court Extends Limits On Expert Testimony, Bus. Ins., Mar. 29, 1999 at 1.
[39] Author states that because these determinations are very judge-specific, a defense attorney should understand the judge well; see Id.
[40] Judicial System ‘Junk Science’ Rightly Excluded, Sun-Sentinel Apr. 2, 1999 at 16A.
[41] Brostoff, supra note 21.
[42] Frank J. Murray, High Court’s 9-0 Vote Narrows Door For Expert Testimony, Wash. Times, Mar. 24, 1999 at A3.
[43] Supreme Court Tightens Reins On Expert Witnesses, Best’s Ins. News, Mar. 24, 1999.
[44] Id.
[45] Goldstein, supra note 3, at 5.
[46] Joan Biskupic, Trial Judges Told To Screen Experts; Supreme Court Grants New Leeway To Exclude Dubious, Irrelevant Testimony, Wash. Post, Mar. 24, 1999 at A2.
[47] At Last, A Logical Decision On Product Liability Cases, Rubber & Plastics News 8, Apr. 5, 1999.
[48] Id.
[49] Id.
[50] Kumho Tire, 119 S.Ct. at 1176.
[51] The Court gave the example of the perfume tester, able to distinguish among 140 odors at a sniff.  The Court also provided guidance to trial judges by suggesting the judge inquire whether the expert’s preparation “is of a kind that others in the field would recognize as acceptable.”  Id.
[52] Hofmann, supra note 38, at 1.
[53] Id.
[54] Id.
[55] Court Trashes Junk Science, supra note 7, at 8.
[56] Robert S. Greenberger, Who’s ‘Expert’? Supreme Court Clarifies Rules On Witnesses, Wall St. J. Mar. 24, 1999 at B1.
[57] James A. Young, ‘Daubert’ Has Made Lawyers Act Professionally, Nat’l L.J. Jan. 11, 1999 at A29.
[58] Id.
[59] Id.
[60] Id.
[61] Id.
[62] The Baby Boom generation through estate planning will be attempting to transfer its wealth to younger generations at reduced values through minority interests in family-owned businesses and family limited partnerships.  These minority interests are subject to minority and marketability discounts, which reduce the value of the gift or estate.  Several studies have documented the amount of these discounts, which fall in the range of 35% to 45% on average.  No longer may a financial expert testify in court stating “based on my professional judgment” the discount is X%.  It must be developed qualitatively and quantitatively with sound financial reasoning.
[63] Many believe that district judges may not be as impartial as the Supreme Court believes they will be.  See Hofmann, supra note 38, at 1.
[64] Author states that because these determinations are very judge-specific, a defense attorney should understand the judge well.  Id.