Court Issues Decision Clarifying Reasonableness of Expert Witness Fees

Court of Appeals issues decision clarifying judicial review of challenges to the reasonableness of expert witness fees but leaves some questions unresolved.

The recent decision of Beckerman v. Surtani, M.D., 48A02-14-7-PL-527, --- N.E.3d --- (Ind. Ct. App., February 13, 2015), involved a dispute of only $2,000. Despite the relatively small amount of money involved, this decision provides important and much-needed guidance for practitioners and trial courts dealing with a party's objection to the rates charged by another party's expert for depositions and other discovery responses.

For many types of litigation, parties will need an expert or experts to either meet their burden of proof or to respond to an opposing party's claims and evidence. Cases involving medical negligence, defective products, or disputes over the cause of a physical injury often consist of a battle between the parties' experts. Therefore, parties often retain highly skilled and qualified experts whose services do not come cheaply. The party retaining an expert, of course, has the choice of whether to accept an expert's rates or to look elsewhere. A party who wishes to depose an opponent's expert does not have this same choice. Instead, a party who believes an opponent's expert's rates are unreasonable must seek relief from a trial court pursuant to Indiana Trial Rule 26(B)(4), which gives a trial court the ability to determine a reasonable rate for expert discovery. Specifically, the Rule states:

The court shall require that the party seeking discovery pay the expert a reasonable fee for time spent in responding to discovery under subdivision (B)(4)(a)(ii) and (B)(4)(b) of this rule.

Ind. Trial Rule 26(B)(4)(c)(1) 

Although expert fees can approach or even exceed $2,000 per hour, the time required to pursue an order reducing such a fee can lead parties to simply pay an unreasonable fee. Even if a party can justify seeking an order from a trial court, the cost of appealing a trial court's decision would, except in the most extreme cases, almost certainly exceed the amount in controversy. Therefore, although disputes over the reasonableness of an expert's fee are not uncommon, it is not surprising that the Beckerman decision was the first instance in which the Indiana Court of Appeals directly and in any sort of detail addressed a challenge to an expert's fee.

In Beckerman, a medical malpractice case, the plaintiff's expert attempted to charge the defendant $4,000 for a deposition and $400 per hour of preparation time. The defendant filed a motion with the trial court objecting to these rates. The trial court issued an order requiring the defendant to pay the plaintiff's expert $2,000 to cover two hours of deposition time and two hours of preparation time and stating that any additional fees required by the expert would be the plaintiff's responsibility. The plaintiff then paid his expert the additional $2,000 requested by the expert and the deposition occurred.

The plaintiff ultimately dismissed the medical malpractice claim and then sought reimbursement for the $2,000 he had paid his expert. The trial court found that, although the plaintiff had shown that $1,000 per hour was a reasonable rate, the defendant should not be required to pay the plaintiff's expert for his preparation time. The plaintiff then appealed.

The Court of Appeals' most important statement could be its preliminary recognition of the relevance of federal authority. Although prior Court of Appeals decisions have recognized the relevance of federal opinions to discovery matters, see, e.g., Riggin v. Rea Riggin & Sons, Inc., 738 N.E.2d 292, 309 (Ind. Ct. App. 2000), the Beckerman decision appears to be the first to have done so on the specific issue of the reasonableness of an expert's fee. Although Indiana courts have not developed a body of case law on this issue, ample federal authority exists. See, e.g., Se-Kure Controls, Inc. v. Vanguard Products Grp., Inc., 873 F. Supp. 2d 939, 955 (N.D. Ill. 2012); Anthony v. Abbott Laboratories, 106 F.R.D. 461 (D.R.I. 1985). In fact, federal courts have adopted a seven-factor test for evaluating the reasonableness of an expert's fee:

1) the witness's area of expertise; (2) the education and training that is required to provide the expert insight which is sought; (3) the prevailing rates of other comparably respected available experts; (4) the nature, quality and complexity of the discovery responses provided; (5) the fee actually being charged to the party who retained the expert; (6) fees traditionally charged by the expert on the rebated matters; and (7) any other factor likely to be of assistance to the court in balancing the interest implicated by Rule 26.

Dominquez v. Syntex Labs, Inc., 149 F.R.D. 166, 167 (S.D. Ind. 1993); Artistic Carton Co. v. Thelamco, Inc., 2008 WL 2622806 (N.D. Ind. 2008)[1] (citing Jochims v. Izzuzu Motors Ltd., 141 F.R.D. 493, 495 (S.D. Iowa 1992)); Profile Products, LLC v. Soil Management Tech., Inc., 155 F.Supp. 2d 880, 886 (N.D. Ill. 2001). Following Beckerman, parties can confidently cite this test and related federal authority when challenging the reasonableness of an expert's fees in state court.

The Beckerman Court also noted that a trial court enjoys considerable discretion when determining a reasonable expert fee. This statement is far from surprising, as trial courts generally enjoy broad discretion when ruling on discovery matters.

Unfortunately, the Beckerman decision left open the question of whether a party is required to pay for an opposing expert's preparation time in addition to actual deposition time. The Court noted that there was no evidence in the record of how much time the plaintiff's expert spent preparing for the deposition or that the plaintiff actually paid the expert for his preparation. Therefore, the Beckerman Court expressly declined to consider the issue of whether Trial Rule 26(B)(4)(c)(i)'s requirement that a party pay a reasonable fee for time spent in responding to discovery encompasses preparation time for a deposition. Federal courts hold that parties are generally not required to pay for an opposing expert's preparation time, but that exceptions exist, such as when a significant period of time passes between the time of an expert's initial work on a case and the date of the deposition. See S.A. Healy Co. v. Milwaukee Metro. Sewerage Dist., 154 F.R.D. 212, 214 (E.D. Wis. 1994). Based on the Beckerman Court's recognition of federal authority's relevance, it is reasonable to assume that Indiana would take a similar approach.

In sum, the Beckerman decision is important in that it is the first published Indiana decision on an issue that arises with some regularity but, because of the interlocutory nature of any order and practical considerations related to cost, had not come directly before the Court of Appeals. Although the decision clarifies the applicability of federal authority and emphasizes a trial court's discretion when setting a reasonable fee, the decision also leaves somewhat open the issue of whether an expert's preparation time is included in the fee. Unfortunately, we are unlikely to hear from the Court of Appeals again on this issue in the near future, and should instead look to federal district court decisions for development on the issue.

[1] In the interest of full disclosure, Barrett McNagny, LLP, represented the party in Artistic Carton that convinced the Federal District Court to reduce an opponent's expert fee. 

The author William A. Ramsey concentrates his practice in the areas of: Appellate Law, Health Care Law, Litigation Services, and Medical Malpractice Defense.