St. Louis Record

Wednesday, July 17, 2019

Judge denies Nostrum Laboratories' motion to exclude expert's testimony in dispute over pharmaceutical equipment

By Karen Kidd | Jun 7, 2018


KANSAS CITY (St. Louis Record) – An expert's testimony about the fair market value of converted equipment used in making generic pharmaceutical products will be allowed in a trial over a soured financial agreement between a Kansas City pharmaceutical business and its financier, a judge in the U.S District Court for the Western District of Missouri, Western Division, recently ruled.

Balboa Capital Corp. wanted the expert testimony and opinions of Dr. Nirmal Mulye to be excluded in its litigation with Nostrum Laboratories but Senior U.S. District Judge Ortrie D. Smitht declined that request in his June 1 ruling. "Based upon the record before it, the court finds Dr. Mulye's opinion meets the low threshold of showing evidentiary reliability in that it appears trustworthy," Smith said in his 24-page order and opinion.

"If Nostrum calls Dr. Mulye as an expert witness, Balboa will be permitted to question Dr. Mulye about his methodology and the reliability (or unreliability) of his methodology during cross-examination," Smith said. " Accordingly, Balboa's motion to exclude Dr. Mulye's testimony because his methodology is allegedly unreliable is denied."

Smith also denied Balboa's motion for summary judgment and Nostrum's motion for partial summary judgment.

Balboa had argued that Mulye's opinions shouldn't apply because conversion of the equipment, as disputed in the case, occurred between February and December 2015, but Mulye's opinions were based on his belief about the equipment's fair market value in April 2017.

In its motion to exclude the expert testimony and opinions of Mulye, Balboa argued that the Mulye's opinions about the fair market value of the equipment were not relevant at the time of the conversion. Mulye's opinions "do not aid the trier of fact" because they were not rendered when the equipment allegedly was converted and Mulye "artificially depresses the value" of the equipment by not opining about the value during the alleged conversion.  

Smith did not agree. "This argument was not included in Balboa's motion, and for this reason alone, the court denies the motion to strike Dr. Mulye's testimony on this basis," Smith said in his order. "Even if the court were to consider this argument, it would still deny the motion. As stated above, the factual basis of an expert's opinion goes to credibility, not admissibility. If the opposing party disputes an expert's methodology, facts, or the documents upon which the expert relied, it should cross-examine the expert."

However, if Nostrum calls Mulye as an expert witness, Balboa will be allowed to question him "about the factual basis for his opinion, including, but not limited to, the length of time between the alleged conversion and the date of his report, and any disputes with regard to his valuation of the equipment," Smith said in his order.

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U.S. District Court for the Western District of Missouri Kansas City Division