United States District Court, D. Colorado
LORRAINE M. RAMOS, et al., Plaintiffs,
v.
BANNER HEALTH, et al., Defendants.
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO
EXCLUDE TESTIMONY OF THOMAS R. KMAK, AND SUA SPONTE REOPENING
EXPERT DISCOVERY
William J. Martínez United States District Judge.
This
case arises out of alleged mismanagement of Defendant Banner
Health's (“Banner Health”) employee 401(k)
plan (the “Plan”). Plaintiffs Lorraine M. Ramos
and others (“Plaintiffs”) bring this class action
against Banner Health, as well as current and former Banner
Health employees (together, “Banner
Defendants”)[1] alleging, among other claims, that Banner
Defendants breached their fiduciary duties under the Employee
Retirement Income Security Act of 1974 (“ERISA”)
by causing the Plan to pay excessive recordkeeping fees. (ECF
No. 118 ¶¶ 120-30.)
Currently
before the Court is Plaintiffs' “Motion to Exclude
and Strike the Testimony of Thomas R. Kmak
(“Kmak”)” (the “Motion”). (ECF
No. 308.) For the reasons discussed below, the Motion is
granted in part and denied in part, and the Court will
sua sponte reopen expert discovery to the limited
extent discussed below, order Banner Defendants to obtain a
supplement from Kmak, and order Banner Defendants to produce
certain materials on which Kmak relies.
I.
BACKGROUND
On
March 26, 2018, Banner Defendants submitted a rebuttal report
by Kmak “to provide opinions related to the
reasonableness of the administrative and recordkeeping fees
paid by the [Plan] and to examine certain opinions” of
Plaintiffs' expert, Martin A. Schmidt. (ECF No. 308 at 3
(internal quotation marks omitted; alterations
incorporated).)[2] To assess the reasonableness of the
Plan's recordkeeping fees, Kmak first “applied
[Fiduciary Benchmarks Insights, LLC's] benchmarking
methodology to build a mathematically derived benchmark group
for Banner Health.” (ECF No. 308-1 at 3.) Based on a
group of benchmark plans for each year from 2009-2017, Kmak
calculated the 25th and 50th percentile fees of the benchmark
group and compared the Plan's fees to those markers. (ECF
No. 308 at 3.)
During
his deposition, Kmak stated that: (a) the formula for
developing the benchmark groups changed over time; (b) as did
the constituent plans comprising those groups; and (c) that
he had not identified the methodology or parameters used to
develop the benchmark groups for each year from 2009-2017.
(ECF No. 308-2 at 9.) He did, however, explain that benchmark
groups are selected by a committee at his company, Fiduciary
Benchmark Insights LLC each year and, once set, the
composition of the individual benchmark groups does not
change over time. (ECF No. 321 at 7.)
He also
explained how he selected the appropriate benchmark group for
the Plan, specifically with Fidelity as the recordkeeper.
(Id.; ECF No. 308-1 at 11-14.) At several instances
during his deposition, Kmak indicated that he could or would
supplement his report. (ECF No. 308-2 at 9, 13.)
Banner
Defendants did not provide a supplemental or revised report
from Kmak, or any additional documents, through the date of
Plaintiffs' reply in support of the Motion, and no party
has suggested that Banner Defendants have provided any such
report or discovery while the Motion has been pending.
II.
DISCUSSION
At
base, the dispute over the admissibility of Kmak's
testimony turns on the alleged failure of Banner Defendants
to disclose and provide the underlying data on which
Kmak's expert opinion relies. Plaintiffs seek to exclude
Kmak's report for failure to identify and produce certain
materials on which he relied. (ECF No. 308 at 10-14.) They
also contend that Kmak's report is “untestable,
unverifiable, unreliable, and inadmissible” because
Kmak failed “to disclose the data and formulas
underlying his benchmark calculations.” (ECF No. 308 at
1.) The Court need only address Plaintiffs' first
argument.
A.
Exclusion under Rules 26(a)(2) and 37(c)
Rule
26(a)(2) generally requires an expert witness to provide a
written report containing:
(i) a complete statement of all opinions the witness will
express and the basis and reasons for them;
(ii) the facts or data considered by the witness in forming
them;
(iii) any exhibits that will be used to summarize or support
them;
(iv) the witness's qualifications, including a list of
all publications authored in ...