United States District Court, D. Delaware
before the Court are Defendants' Motion to Strike the
Supplemental Report, Opinions, and Testimony of Plaintiff s
expert William Uchimoto (D.I. 93) and related briefing (D.I.
94, 102), Defendants' Motion to Exclude the Testimony and
Opinions of Mr. Uchimoto (D.I. 89) and related briefing (D.I.
90, 92, 101), and Plaintiffs Motion for Leave to Serve a
Second Supplemental Expert Report Nunc Pro Tunc
(D.I. 108) and related briefing (D.I. 110, 112).
I will deny Defendants' motion to strike Mr.
Uchimoto's supplemental report. The supplemental report
apparently seeks to "clarify  the scope" of the
original report. (D.I. 94, Exh. A at p. 2). Defendants argue
they are "extremely prejudiced" by its late
disclosure. (D.I. 94 at 10). I do not see any prejudice.
While the supplemental report appears much narrower in scope,
the opinions therein appear to be consistent with those in
the original report. (Compare D.I. 90, Exh. A,
with D.I. 94, Exh. A). The primary difference seems
to be that, now, Mr. Uchimoto characterizes his opinions as
relating to "materiality, causation, and damages."
(D.I. 94, Exh. A at p. 3). Otherwise, I do not see any
material differences between the opinions set forth in the
reports. Thus, I am hard pressed to see how Defendants are
prejudiced and do not otherwise see any reason under the
Pennypack factors to strike the report. See
Meyers v. Pennypack Woods Home Ownership Ass'n, 559
F.2d 894, 904-05 (3d Cir. 1977) (setting forth factors to be
weighed in deciding whether to exclude an untimely expert
I will grant in part and deny in part Defendants' motion
to exclude the opinions and testimony of Mr. Uchimoto.
Defendants' primary argument is that Mr. Uchimoto's
proffered testimony contains improper legal opinions.
(See D.I. 90 at 9-15; D.I. 94 at 8). Defendants
additionally contend that his testimony does not meet the
Daubert requirements of fit and
reliability. (D.I. 90 at 15-18; D.I. 94 at 8-9).
According to Defendants, Mr. Uchimoto's reports
"contain neither underlying methodology nor anything
reflecting upon his expertise in the industry." (D.I. 90
at 16; see also D.I. 94 at 8-9).
light of Mr. Uchimoto's supplemental report and the
briefing, I understand Mr. Uchimoto to be offering opinions
related to three issues only: (1) materiality, (2) causation,
and (3) damages. (See D.I. 94, Exh. A; D.I. 92 at
17 (stating that Mr. Uchimoto's "role is to opine on
materiality, causation, and damages")).
materiality, it appears that Mr. Uchimoto will testify about
the differences between preferred and common shares and the
effect of "carve-outs." (D.I. 94, Exh. A at p. 3).
Further, he will "address the attendant effect that
preferred shares and carve-outs have on the actual value of
common shares." (Id. at p. 4). I understand
this proffered testimony related to stock preferences and
carve-outs to form the basis for Mr. Uchimoto's opinion
that the representations and omissions at issue would have
been viewed by a reasonable investor as having significantly
altered the "total mix" of information available.
(Id. at p. 3).
opinion, Mr. Uchimoto's testimony related to stock
preferences and carve-outs, which I understand to be based on
his thirty-six years of experience as a lawyer in the
securities industry, is relevant to and will help the jury in
determining the issue of materiality. See Shapiro v. UJB
Fin. Corp., 964 F.2d 272, 280 n.l 1 (3d Cir. 1992) (The
materiality element of a Rule 10b-5 violation "is a
mixed question of law and fact, and the delicate assessments
of the inferences a reasonable shareholder would draw from a
given set of facts are peculiarly for the trier of
fact." (citation omitted)); Fed.R.Evid. 702. I think
that to the extent preferred shares and carve-outs affect the
value of common stock, the more likely misrepresentations or
omissions about preferred shares and carve-outs would be
important to a reasonable investor in deciding whether to
purchase a company's common shares. Thus, I will not
exclude Mr. Uchimoto's proffered "materiality"
exclude his proffered opinions on causation and damages,
causation, Mr. Uchimoto's proffered testimony seems to be
that, in his opinion, the representations and omissions at
issue "directly induced" Plaintiff to enter
employment agreements with Ratelntegration, "pursuant to
which he received shares and options that were, at all
relevant times, worthless." (D.I. 94, Exh. A at p. 4;
see also D.I. 90, Exh. A at p. 7). This statement is
conclusory and is otherwise not a proper expert opinion. It
is unsupported by any technical or other specialized
knowledge that would be helpful to the jury. See
Fed. R. Evid. 702. Even if it were supported, why Plaintiff
decided to work for Ratelntegration is a factual question on
which expert testimony is unnecessary. The jury will be able
to use its common sense and experience to understand the
relevant testimony, and to decide whether or not to believe
Plaintiff when he explains his reasons for accepting a
position with the company. Thus, I will exclude Mr.
Uchimoto's proffered "causation" opinion.
damages, Mr. Uchimoto's "analysis" amounts to
nothing more than a simple math equation. He takes 5.42% of
$20, 000, 000 to reach a total of $1, 084, 000. (D.I. 90,
Exh. A at p. 10; D.I. 94, Exh. A at p. 4). There is no
scientific, technical, or other specialized knowledge
involved that would help the jury. See Fed. R. Evid.
702. In other words, I do not think this calculation requires
an expert; the jury can do the math. Of course, Plaintiff may
put on evidence in regard to the facts underlying the $1,
084, 000 number. He can present facts related to his 5.42%
ownership of Rate Integration and Thekkethala's
representation that the company was valued at $20, 000, 000.
Plaintiff can argue at closings whatever inferences he wants
the jury to draw from those facts. But Mr. Uchimoto may not
testify as to his purported damages analysis.
reasons stated above, Defendants' motion to strike Mr.
Uchimoto's supplemental report (D.I. 93) is
DENIED and Defendants' motion to exclude
the testimony of Mr. Uchimoto (D.I. 89) is GRANTED IN
PART and DENIED IN PART. Mr.
Uchimoto's proffered testimony related to causation and
damages is EXCLUDED. Plaintiffs motion to
serve a second supplemental expert report (D.I. 108) is
DISMISSED AS MOOT.
is SO ORDERED.
 Defendants also cite the
Daubert requirement of qualification. (See
D.I. 90 at 15). But I do not see in Defendants' motion
any argument that Mr. Uchimoto is unqualified. Rather,
Defendants focus on the requirements of fit and reliability.
Thus, I see ...