United States District Court, D. Colorado
U.S. COMMODITY FUTURES TRADING COMMISSION, Plaintiff,
GREGORY L. GRAMALEGUI, Defendant.
ORDER REGARDING DEFENDANT'S MOTION TO PRECLUDE
REPORT OF PLAINTIFF'S REBUTTAL EXPERT UNDER FED. R. EVID.
702, ET AL (REFILED, PREVIOUSLY FILED AS THE NOW STRICKEN ECF
P. Gallagher, United States Magistrate Judge
matter comes before the Court on Defendant's motion (ECF
#114) (which was referred to this Magistrate
Judge (ECF #115)),  the CFTC's response (ECF # 126), and
Defendant's reply (ECF # 130). The Court has reviewed
each of the aforementioned documents and any attachments. The
Court has also considered the entire case file, the
applicable law, and is sufficiently advised in the premises.
Oral argument was not requested and is not necessary to
resolve this discrete issue. I incorporate by reference my
ruling entitled “Order regarding the CFTC's motion
to exclude the expert report and testimony of David R.
Aronson” (ECF #163). For the following reasons, I DENY
the motion or find it MOOT as set forth below.
purported rebuttal to Defendant's expert David Aronson,
the CFTC submitted a report from Jack Schwager to which
Defendant has objected. I will address the relevant
objections in turn. Before reaching those objections, I refer
back to the aforementioned Order in ECF #163. In that Order,
I excluded certain proposed testimony from Mr. Aronson. In
particular, I excluded the testimony which would have come
from the answer to the 1st and 3rd
questions asked of Mr. Aronson. I allowed the answer to
question 2(a) in that:
Mr. Aronson will be able to opine as to whether Defendant was
offering and selling an advisory service or teaching. Mr.
Aronson will not be able to proffer for himself the
definition of advisory service. Mr. Aronson will be able to
give specific examples to discuss how a teacher might use
“current” or “real-time examples” as
a teaching method.
allowed the answer to question 2(b) in that:
Mr. Aronson may opine that creating a system for trades never
entered into could be of educational benefit, thus bolstering
the assertion that Defendant was merely teaching.
starting point, the purpose or Mr. Schwager's testimony
would be only rebuttal to Mr. Aronson. Therefore any
testimony not rebutting the two areas set forth above will be
excluded. In terms of parsing out what rebuts 2(a) and (b), I
next look to the Schwager report at section VI., 13 (ECF
#114, Schwager report, pp. 4-5). Mr. Schwager breaks his
opinion down into sections a-e. Based on my Order in ECF #
163, I now find that the opinions in sections (a), (d), and
(e) are not relevant as I have excluded the Aronson report
which they purport to rebut and that issue is now moot. I
make no further findings on these sections other than to
exclude from testimony the Schwager opinions in VI., 13 (a),
(d) & (e).
(b) and (c), I must look further. As a preliminary matter,
Defendant moves to exclude the testimony of Mr. Schwager on
the basis that it is not rebuttal testimony and that instead
Mr. Schwager should have been designated as an initial
expert. I do not find merit to this argument.
26(a)(2)(D)(ii) defines rebuttal testimony as that which
“is intended solely to contradict or rebut evidence on
the same subject matter identified by another party under
Rule 26(a)(2)(B).” The same subject matter is not to be
narrowly construed or interpreted in an overly restrictive
manner. See, TC Systems, Inc. v. Town of Colonie, New
York, 213 F.Supp.2d 171, 180 (N.D. NY 2002), see
also, Armstrong v. I-Behavior Inc., 2013 WL 2419794 * 3
(D. Colo. 2013) (not reported). The proposed testimony of Mr.
Schwager will be viewed from that lens.
stated above, I have allowed in the Aronson testimony and
opinions related to whether Defendant was acting as a
teacher, thus falling into the exception set forth in 7
U.S.C. 1(a)(12), sections (B). I also allowed in testimony
related to creating a reward-to-risk system for trades never
entered into as evidence of educational intent. In my prior
order, I set forth the definition of commodity trading
advisor from 7 U.S.C. 1(a)(12), sections (A) & (B).
See ECF #163, pp. 5-6. I did not then provide
section (C), which states:
(C) Incidental services
Subparagraph (B) shall apply only if the furnishing of such
services by persons referred to in subparagraph (B) is solely
incidental to the conduct of their business or profession.
Mr. Schwager, in 13(b), states:
Mr. Aronson's contention that Defendant was offering an
educational product rather than an advisory service seems to
implicitly assume that there are mutually exclusive items -
an unwarranted assumption. Mr. Aronson ignores addressing the
numerous instances of evidence indicating that the defendant
(sic) was also providing actionable trading recommendations