Expert Witness Blog

The Southern District of New York delivered a significant ruling on expert witness testimony in Securities and Exchange Commission v. Terraform Labs Pte Ltd. et al, No. 1:2023cv01346, a high-profile cryptocurrency securities fraud case that proceeded to trial in January 2024. The court’s comprehensive analysis of expert witness admissibility provides crucial guidance for practitioners utilizing Securities Expert Witness testimony in complex financial fraud litigation.

Case Background and Parties

The Securities and Exchange Commission brought enforcement action against Terraform Labs Pte Ltd. and related defendants, alleging violations of federal securities laws in connection with the marketing and sale of cryptocurrency tokens LUNA and MIR. The case centered on allegations that defendants conducted unregistered securities offerings and engaged in fraudulent conduct in connection with their cryptocurrency operations.

In the landmark case of Smith v. Medical Center East, Supreme Court of Alabama 1991, the role and admissibility of an Emergency Medical Services Expert Witness became central to the court’s analysis of alleged medical negligence and causation in the context of emergency trauma care and inter-hospital transfer protocols.

Background and Facts

The case arose from the tragic death of Scott Smith following a motor vehicle accident. Smith was initially treated at the scene by emergency medical technicians (EMTs) and subsequently transported to Medical Center East (MCE) rather than Carraway, a designated Level I trauma center. The plaintiff, Calvin Smith, alleged that multiple defendants—including Carraway, MCE, Southeastern Emergency Physicians, and Cardio-Thoracic Surgeons—were negligent in failing to ensure Scott Smith was transported and transferred to the most appropriate facility for his injuries.

In the recent appellate decision of Sonic Mfg. Tech. v. AAE Systems, California Court of Appeal 2011, the role of a Contract Manufacturing Expert Witness was pivotal in resolving a complex dispute over payment obligations and industry practices in contract manufacturing.

Background and Facts

Sonic Manufacturing Technologies, Inc. (“Sonic”) and AAE Systems, Inc. (“AAE”) entered into a series of purchase orders for the manufacture and delivery of electronic components. Sonic, as the contract manufacturer, was responsible for procuring necessary parts and assembling products according to AAE’s specifications. The dispute arose when AAE delayed payment for materials and refused to pay certain invoices, including those for price purchase variance (PPV) and materials Sonic had acquired in anticipation of fulfilling AAE’s orders. Sonic placed AAE on a shipping hold after extended delays and sought to recover costs incurred for materials and PPV, arguing that such billing was consistent with industry custom and practice.

In the eminent domain case of State v. Northeast Building Company, 421 S.W.2d 297 (Mo. 1967), the Missouri Supreme Court addressed the pivotal role of a Machinery & Equipment Appraisal Expert Witness in determining just compensation for property condemned by the State Highway Commission.

Background and Parties

The State Highway Commission initiated condemnation proceedings against Northeast Building Company and other landowners to acquire property for public use. The property included land, buildings, and significant mechanical equipment—specifically, boilers and other fixtures integral to the operation of the premises. The central dispute concerned the fair market value of the property, including whether and how to account for the machinery and equipment as part of the compensation owed to the landowners.

In the consolidated fraud and negligence action of THORNTON v. FORD MOTOR COMPANY, Oklahoma Court of Appeals 2012, the pivotal role of an Automobile Dealerships Expert Witness was central to the court’s analysis of agency, apparent authority, and vicarious liability in the context of dealership operations and manufacturer oversight.

Background and Parties

The plaintiffs, a group of customers, brought suit against Ford Motor Company, alleging fraud and negligence related to their dealings with a Ford-branded dealership. The litigation consolidated seven lawsuits for a non-jury trial. Ford was the sole defendant present, and the trial focused on whether Ford could be held liable for the dealership’s actions under theories of agency and apparent authority.

In the recent case of Thorpe v. Bisignano, No. 24-2214 (7th Cir. 2025), the United States Court of Appeals for the Seventh Circuit addressed the critical role of the Disability Expert Witness—specifically, a vocational expert—in Social Security disability proceedings. The court’s analysis provides a clear example of how expert testimony is evaluated for reliability and the procedural requirements for challenging such testimony.

Background and Parties

Donald Thorpe, the claimant, sought Social Security disability benefits, alleging that his medical conditions rendered him unable to engage in substantial gainful activity. The Social Security Administration denied his claim, and the matter proceeded to a hearing before an Administrative Law Judge (ALJ). At the hearing, a vocational expert provided testimony regarding Thorpe’s ability to perform work available in the national economy, considering his limitations.

In the product liability case of Tunnell v. Ford Motor Co., 330 F. Supp. 2d 707 (W.D. Va. 2004), the admissibility and reliability of survey evidence presented by a Public Opinion & Survey Research Expert Witness were central to the court’s analysis. The case involved allegations regarding the safety and consumer expectations of Ford vehicles, specifically focusing on battery disconnects and related product features.

Background and Parties

Plaintiff Tunnell brought suit against Ford Motor Company, asserting that certain design features failed to meet reasonable consumer expectations and posed safety risks. To substantiate these claims, Tunnell retained survey experts Pamela Kiecker and Marjorie Adams to conduct consumer expectation surveys. The surveys were intended to provide direct evidence of how typical consumers perceived the safety and functionality of the product at issue.

In the recent case of Turan v Union Modular Homes, LLC, 2025, the New York Appellate Division, Third Department, addressed critical questions of negligence and industry practice in the modular home sector, relying heavily on the testimony and analysis of a Manufactured Homes Expert Witness.

Background and Parties

The plaintiff contracted with Union Modular Homes, LLC (“Union”) to purchase and install a modular home manufactured by Westchester Modular Homes, Inc. (“Westchester”). The contract required Union to construct the foundation and site work, while Westchester was responsible for delivering and setting the modular components. The agreement included a ten-year structural warranty to be transferred to the plaintiff upon full payment.

In the landmark case of United States v. Yates, No. 11-16093 (11th Cir. 2013), the role of the Fish Expert Witness was central to the dispute over the prosecution of a commercial fisherman charged with federal offenses for harvesting and disposing of undersized red grouper in the Gulf of Mexico.

Background and Parties

John L. Yates, captain of a commercial fishing vessel, was prosecuted by the United States government for violating 18 U.S.C. § 2232(a) and 18 U.S.C. § 1519. The charges stemmed from allegations that Yates knowingly harvested red grouper below the minimum legal size and subsequently ordered the disposal of these fish to prevent their seizure by federal authorities. The government asserted that Yates’s actions constituted both the destruction of evidence and obstruction of a federal investigation.

In the recent case of USA v. Suzanne Ellen Kaye, No. 23-11423 (11th Cir. 2024), the admissibility and role of an Internet Expert Witness became a central issue in evaluating alleged criminal threats made via social media platforms. This case provides a clear illustration of the courts’ approach to expert testimony related to internet communications and the application of Daubert standards in federal criminal proceedings.

Background and Facts

Suzanne Ellen Kaye was charged with two counts of transmitting threats in violation of 18 U.S.C. § 875(c), based on videos she posted to Facebook, Instagram, and TikTok. The prosecution alleged that Kaye’s statements in these videos constituted “true threats” not protected by the First Amendment. The case focused on whether the content and context of Kaye’s online communications met the legal threshold for criminal threats.