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Busystore Limited in Liquidation v. Cushman & Wakefield of Pennsylvania, Inc.

United States District Court, E.D. Pennsylvania

May 24, 2018

BUSYSTORE LIMITED IN LIQUIDATION, and BERGFELD CO. LIMITED, Plaintiffs,
v.
CUSHMAN & WAKEFIELD OF PENNSYLVANIA, INC., and COZEN O'CONNOR, P.C., Defendants, and CUSHMAN & WAKEFIELD OF PENNSYLVANIA, INC., Third Party Plaintiff,
v.
CHAIM ZEV LEIFER, HASKEL KISH and JFK BLVD. ACQUISITION G.P., LLC, Third Party Defendants.

          MEMORANDUM

          DuBois, J.

         I. INTRODUCTION

         This is a fraud case in which Busystore Limited and Bergfeld Co. Limited (collectively, “plaintiffs”), allege that defendants, Cushman & Wakefield of Pennsylvania, Inc. (“C & W”), Blank Rome LLP (“Blank Rome”), [1] and Cozen O'Connor, P.C. (“Cozen”), induced them into investing at least $27 million in a real-estate development project, the River City Property (“River City” or “the Property”), in Philadelphia, Pennsylvania, by fraudulently misrepresenting applicable zoning restrictions, the feasibility of the project, and the valuation of the real estate.

         The facts of this case are set forth in detail in the Court's Memoranda dated February 16, 2018 (Document No. 185) and April 25, 2018 (Document No. 205) and the Court will not repeat the factual history here. C&W seeks to introduce the testimony of Professor Chaim Saiman, a professor of law at Villanova University School of Law and an expert in Jewish Law. The parties have stipulated that Saiman may testify concerning, inter alia, the cultural norms and business practices found in the ultra-Orthodox Jewish community. The parties have also stipulated that Saiman may not testify as to, inter alia, Mr. Berger's state of mind and the cause of plaintiffs' loss.[2]

         Following a telephone conference on May 9, 2018, the parties asked the Court to resolve three outstanding issues with respect to Saiman's testimony. On May 11, 2018, plaintiffs and C&W submitted a joint letter to the Court with respect to Saiman's testimony, setting forth their positions on the three issues upon which they could not agree. This Memorandum resolves those remaining issues not covered by the stipulation.

         II. APPLICABLE LAW

         Federal Rule of Evidence 702 provides that:

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, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.

         Under Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 141 (1999), this gatekeeping function extends beyond scientific testimony to testimony based on “technical” and “other specialized” knowledge. Using the Kumho analysis, a court must determine whether an expert “employs in the courtroom the same level of intellection rigor that characterizes the practice of an expert in the relevant field.” Id. at 152.

         Rule 702 has “a liberal policy of admissibility.” Pineda v. Ford Motor Co., 520 F.3d 237, 243 (3d Cir. 2008) (quoting Kannankeril v. Terminix Int'l, Inc., 128 F.3d 802, 806 (3d Cir. 1997)). As such, the “rejection of expert testimony is the exception and not the rule.” Fed.R.Evid. 702, advisory committee's note. “Rule 702 embodies three distinct substantive restrictions on the admission of expert testimony: qualifications, reliability, and fit.” Elcock v. Kmart Corp., 233 F.3d 734, 741 (3d Cir. 2000) (citing In re Paoli R.R. Yard PCB Litig., 35 F.3d 717, 741 (3d Cir. 1994)).

         III. DISCUSSION

         A) Testimony regarding whether the conduct of Berish Berger was consistent with business practices and customs found within the ultra-Orthodox Jewish community

         Plaintiffs argue that Saiman should be precluded from testifying that Berger acted consistent with business practices and customs within the ultra-Orthodox Jewish in investing in the Property. Specifically, plaintiffs assert that Saiman's opinion with respect to this issue is unreliable, because Saiman's testimony relies on stereotypes that Saiman acknowledged at his deposition do not characterize Berger, who is an “exceptional member” of his religious community. C&W argues that Saiman should be permitted to testify-using Berger's own testimony and facts of record-regarding the extent to which Berger acted consistently with the business practices and customs of the ultra-Orthodox Jewish community to assist the jury in understanding Berger's conduct in the broader context of that community.

         The Court agrees with C&W. Samain's testimony relies on statements made by Berger himself and applies those statements to his own area of expertise-ultra-Orthodox customs and business practices. Saiman may testify, in sum, that the informal nature of the River City transaction, coupled with reliance on co-religionists, is consistent with those customs and business practices. That Saiman acknowledged that Berger himself was a leader in his community and thus an “exceptional” member of that community may be appropriately addressed on cross-examination. See United States v. Mitchell, 365 F.3d 215, 244 (3d Cir. 2004) (“As long as an ...


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