Summary
In Thomas a statistician was offered to testify about statistical evidence of discrimination in an employment discrimination case.
Summary of this case from Orthoflex, Inc. v. Thermotek, Inc.Opinion
No. 3-02-CV-0343-M.
September 2, 2004
MEMORANDUM OPINION AND ORDER
Defendant Deloitte Consulting LP has filed a motion to exclude the expert testimony and expert reports of Dr. Marion G. Sobol, a statistician retained by plaintiff to help prove that age and gender were factors in her termination and other employment actions involving senior managers at DC.com. For the reasons stated herein, the motion is granted.
I.
On March 28, 2000, Plaintiff Rhonda Thomas, age 41, was hired as a senior manager for DC.com, a now defunct unit of Deloitte Consulting LP. Plaintiff was terminated by the company on February 16, 2001. After exhausting her administrative remedies, plaintiff sued for sex and age discrimination under Title VII of the Civil Rights Act of 1964, as amended ("Title VII"), 42 U.S.C. § 2000e, et seq., and the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. § 621, et seq. Defendant maintains that plaintiff was terminated as part of a reduction in force due to her substandard performance and other non-discriminatory factors. The case is currently set for trial on a three-week docket beginning January 11, 2005. By the present motion, defendant seeks to exclude the testimony and reports of plaintiff's statistical expert, Dr. Marion G. Sobol. The motion has been fully briefed by the parties and is ripe for determination.
Plaintiff also sued for: (1) retaliation under Title VII; (2) wage discrimination under Title VII, the ADEA, and the Equal Pay Act; and (3) promissory estoppel and detrimental reliance under Texas law. Those claims were dismissed by the court on summary judgment. See ORDER, 12/9/03.
II.
Fed.R.Evid. 702 governs the admissibility of expert testimony. This rule provides:
If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.
FED.R.EVID. 702. Effective December 1, 2000, Rule 702 was amended to incorporate the principles first articulated by the Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). See FED. R. EVID. 702, Adv. Comm. Notes (2000). Under Daubert, expert testimony is admissible only if the proponent demonstrates that: (1) the expert is qualified; (2) the evidence is relevant to the suit; and (3) the evidence is reliable. See Watkins v. Telsmith, Inc., 121 F.3d 984, 988-89 (5th Cir. 1997). The trial court is charged with making this preliminary determination under Fed.R.Evid. 104(a). Andrade Garcia v. Columbia Medical Center of Sherman, 996 F. Supp. 617, 620 (E.D. Tex. 1998); see also FED. R. EVID. 702, Adv. Comm. Notes (2000). Daubert lists five non-exclusive factors to consider when assessing the scientific validity or reliability of expert testimony. These factors are:
Rule 104(a) provides:
Preliminary questions concerning the qualification of a person to be a witness, the existence of a privilege, or the admissibility of evidence shall be determined by the court, subject to the provisions of subdivision (b). In making its determination it is not bound by the rules of evidence except those with respect to privileges.
FED. R. EVID. 104(a).
1. Whether the theory or technique has been tested;
2. Whether the theory or technique has been subjected to peer review and publication;
3. The known or potential rate of error of the method used;
4. The existence and maintenance of standards and controls in the methodology; and
5. Whether the theory or method has been generally accepted by the scientific community.Daubert, 113 S.Ct. at 2796-97. The Daubert factors also might be applicable when assessing the reliability of non-scientific expert testimony, depending upon "the particular circumstances of the particular case at issue." Kumho Tire Company, Ltd. v. Carmichael, 526 U.S. 137, 150, 119 S.Ct. 1167, 1175, 143 L.Ed.2d 238 (1999). The Daubert analysis focuses on the reasoning or methodology employed by the expert, not the ultimate conclusion. Watkins, 121 F.3d at 989. The purpose of such an inquiry is "to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field." Skidmore v. Precision Printing and Packaging, Inc., 188 F.3d 606, 618 (5th Cir. 1999), quoting Kumho Tire, 119 S.Ct. at 1176. Thus, the court "must review only the reasonableness of the expert's use of such an approach, together with his particular method of analyzing data so obtained, to draw a conclusion regarding the specific matter to which the expert testimony is directly relevant." American Tourmaline Fields v. International Paper Co., 1999 WL 242690 at *2 (N.D. Tex. Apr. 19, 1999), citing Kumho Tire, 119 S.Ct. at 1177.
The test of reliability is necessarily a flexible one. As the Supreme Court has recognized, the factors identified in Daubert "may or may not be pertinent in assessing reliability, depending on the nature of the issue, the expert's particular expertise, and the subject of his testimony." Kumho Tire, 119 S.Ct. at 1175; see also Watkins, 121 F.3d at 988-89 ("Not every guidepost outlined in Daubert will necessarily apply to expert testimony . . ."). A trial court has wide latitude in deciding how to determine reliability, just as it has considerable discretion with respect to the ultimate reliability determination. Kumho Tire, 119 S.Ct. at 1176. In most cases, the court must first decide whether the factors mentioned in Daubert are appropriate. Black v. Food Lion, Inc., 171 F.3d 308, 311-12 (5th Cir. 1999). "Once it considers the Daubert factors, the court then can consider whether other factors, not mentioned in Daubert, are relevant to the case at hand" Id.; see also American Tourmaline Fields, 1999 WL 242690 at *3.
Notwithstanding the dictates of Daubert and its progeny, "the rejection of expert testimony is the exception rather than the rule." See FED. R. EVID. 702, Adv. Comm. Notes (2000). Daubert did not work a seachange over federal evidence law, and "the trial court's role as gatekeeper is not intended to serve as a replacement for the adversary system." See id., quoting United States v. 14.38 Acres of Land, More or Less, Situated in Leflore County, Mississippi, 80 F.3d 1074, 1078 (5th Cir. 1996). As Daubert itself recognized, "[v]igorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence." Daubert, 113 S.Ct. at 2798; see also In re Paoli Railroad Yard PCB Litigation, 35 F.3d 717, 744 (3d Cir. 1994), cert. denied, 115 S.Ct. 1253 (1995) ("The grounds for the expert's opinion merely have to be good, they do not have to be perfect.").
III.
Plaintiff has designated Dr. Marion G. Sobol as an expert on statistics. Based on data provided by plaintiff and her attorney, Dr. Sobol prepared a report analyzing the termination rates of 40 DC.com senior managers between January 2001 and November 2002 ("Report I"). (Def. App. at 35-37). This report shows that 16 senior managers, or 40% of the employees considered in the study, were terminated during this 22-month period. ( Id. at 35). DC.com employed only five women as senior managers and all were terminated. ( Id.). By contrast, only 11 of the 35 males employed as senior managers were terminated by the company. ( Id.). Thus, no female senior managers were retained while 68.6% of their male counterparts kept their jobs. ( Id.). With regard to age disparity, 62.5% of the terminated employees were 40 years of age or older, while only 29% of those retained were under 40. ( Id. at 36). The average age of females who were terminated was 41.8 years old. ( Id. at 37).In a second report, Dr. Sobol considered the promotion history of all Deloitte Touche groups from 1997 to 1999 ("Report II"). ( Id. at 42-45). This report shows that men were four times more likely than women to be partners and two times more likely than women to be directors. ( Id. at 42-43). During this period, men were three times more likely than women to be promoted from senior manager to partner and twice as likely as women to be promoted to director. ( Id.). Dr. Sobol believes that these statistical differences are significant and concludes that "there is little chance of closing the [gender] gap in the near future." ( Id. at 43).
Without specifically addressing any of the Daubert factors, defendant contends that Dr. Sobol's expert reports and related testimony are unreliable and irrelevant. More particularly, defendant argues that the opinions contained in Report I are inadmissible because Dr. Sobol: (1) either failed to test for statistical significance or did not use the proper threshold for statistical significance in her analysis; (2) ignored the factors actually considered by defendant in terminating plaintiff; (3) relied only on data provided by plaintiff in formulating her opinions; and (4) offers improper legal conclusions. Defendant further maintains that the opinions contained in Report II are irrelevant to the issues in this case.
A.
In Report I, Dr. Sobol used statistical evidence in an attempt to show that a disproportionate number of female and older senior managers were terminated by defendant as part of a reduction in force. Defendant challenges this evidence because Dr. Sobol failed to test for statistical significance with respect to: (1) the impact of gender on the termination of senior managers at DC.com; (2) the impact of utilization on performance ratings of senior managers; (3) the relationship between performance and utilization of senior managers; and (4) the differences in pay between male and female senior managers.
A plaintiff in a Title VII or an ADEA case may establish a prima facie case of disparate treatment by the use of statistics if a "gross disparity" in the treatment of employees based on gender or age is shown. See Siler-Khodr v. University of Texas Health Science Center at San Antonio, 261 F.3d 542, 546-47 (5th Cir. 2001), cert. denied, 123 S.Ct. 694 (2002); Anderson v. Douglas Lomason Co., Inc., 26 F.3d 1277, 1285 (5th Cir. 1994), cert. denied, 115 S.Ct. 1099 (1995). However, not all disparities are probative of discrimination. "Before a deviation from a predicted outcome can be considered probative, the deviation must be `statistically significant'." Ottaviani v. State University of New York at New Paltz, 875 F.2d 365, 371 (2d Cir. 1989), cert. denied, 110 S.Ct. 721 (1990). That is, the evidence must offer some indication that the disparity is not simply due to chance. Segar v. Smith, 738 F.2d 1249, 1282 (D.C. Cir. 1984), cert. denied, 105 S.Ct. 2357 (1985); see also Mitchell v. DCX, Inc., 274 F. Supp.2d 33, 45 (D.D.C. 2003) ("A statistical disparity . . . is not, in and of itself, probative of discriminatory intent unless it is statistically significant.").
"Statistical significance" is a measure of the probability that a disparity is simply due to chance rather than any other identifiable factor. Because random deviations from the norm can always occur, statisticians do not consider slight disparities between predicted and actual results to be statistically significant. However, as the disparity between predicted and actual results becomes greater, it becomes less likely that the deviation is a random fluctuation. When the probability that a disparity is due to chance sinks to a certain threshold level, statisticians can infer from the statistical evidence that the deviation is attributable to some other cause unrelated to mere chance.
"Standard deviation" is a unit of measurement used to express the probability that an observed result is merely a random deviation from a predicted result. The standard deviation is a measure of spread, dispersion, or variability of a group of numbers. Generally, the fewer the number of standard deviations that separate an observed from a predicted result, the more likely it is that any observed disparity between predicted and actual results is not really a disparity at all but rather a random fluctuation. Conversely, the greater the number of standard deviations, the less likely it is that chance is the cause of any difference between the expected and observed results. A finding of two standard deviations corresponds approximately to a one in 20, or 5%, chance that a disparity is merely a random deviation from the norm. Ottaviani, 875 F.2d at 371 (citations omitted).
Plaintiff does not dispute that Dr. Sobol failed to test for statistical significance in these areas. Instead, she argues that such an analysis is not a requirement for admissibility. "While precise calculations of statistical significance are not essential to statistical proof, no valid conclusions regarding the relationship of observed selection patterns to the defendant's behavior can be drawn absent some minimal framework for analysis." Pegues v. Mississippi State Employment Service of Mississippi Employment Security Commission, 699 F.2d 760, 767-768 (5th Cir.), cert. denied, 104 S.Ct. 482 (1983); see also Hill v. K-Mart Corp., 699 F.2d 776, 780 n. 7 (5th Cir. 1983) (noting that "statistical significance" is a critical concept that "gives meaning to bare numbers"). Here, Dr. Sobol's statistics are little more than a list of numbers that are not probative of discrimination or helpful to a jury in determining disparate treatment. Consequently, those portions of Report I which fail to test for statistical significance must be excluded under Daubert. See Good v. Fluor Daniel Corp., 222 F. Supp.2d 1236, 1243 (E.D. Wash. 2002).
B.
Report I also addresses: (1) the impact of age on the termination of senior managers at DC.com; (2) the impact of performance ratings on the termination of senior managers; and (3) the correlation between performance scores and utilization rates of male and female senior managers. Although Dr. Sobol did test for statistical significance in these areas, the results ranged from 7% to 10%. Defendant maintains that a 5% threshold, or two standard deviations, is generally required for a result to be "statistically significant." Therefore, defendant argues that Dr. Sobol's statistical analysis is unreliable.The Fifth Circuit has never adopted a "bright line" test for statistical significance. See Rendon v. ATT Technologies, 883 F.2d 388, 397-98 (5th Cir. 1989) (rejecting argument that there is a strict legal benchmark requiring a particular number of standard deviations to demonstrate that data has statistical significance). Indeed, most courts have rejected the arbitrary application of a 5% threshold. See, e.g. Kadas v. MCI Systemhouse Corp., 255 F.3d 359, 362 (7th Cir. 2001); Heller v. Shaw Industries, Inc., 167 F.3d 146, 158 (3d Cir. 1999); Waisome v. Port Authority of New York New Jersey, 948 F.2d 1370, 1376 (2d Cir. 1991); MacDissi v. Valmont Industries, Inc., 856 F.2d 1054, 1058 n. 3 (8th Cir. 1988). "Whether a given [test result] should be regarded as statistically significant must be determined on a case by case basis since the value signifying statistical significance is dependent upon sample size." Overton v. City of Austin, 871 F.2d 529, 544 (5th Cir. 1989) (Jones, J., concurring); see also Kadas, 255 F.3d at 363 ("It is for the judge to say, on the basis of the evidence of a trained statistician, whether a particular significance level, in the context of a particular study in a particular case, is too low to make the study worth the consideration of judge or jury.").
Notwithstanding the absence of a "bright line" test for statistical significance, Daubert instructs that a court should consider the known or potential rate of error when assessing the scientific validity or reliability of expert testimony. Daubert, 113 S.Ct. at 2797. The court is unaware of any employment case where the jury was allowed to consider statistical evidence of discrimination that approached the 10% level used by Dr. Sobol. To the contrary, "[s]tatisticians tend to discard chance as an explanation for a result when deviations from the expected value approach two standard deviations." Payne v. Travenol Laboratories, Inc., 673 F.2d 798, 821 (5th Cir.), cert. denied, 103 S.Ct. 451 (1982). Given the relatively small sample size used by Dr. Sobol, the court has little difficulty in concluding that a statistical deviation of 7% to 10% does not adequately rule out that the alleged disparities identified in her report were due to chance. As a result, Dr. Sobol will not be permitted to offer testimony regarding the results of her statistical analysis. See Elliott v. Group Medical Surgical Service, 714 F.2d 556, 565 (5th Cir. 1983), cert. denied, 104 S.Ct. 2658 (1984) (requiring 5% level of statistical significance to conclude that age was a factor in decision to terminate plaintiff); E.E.O.C. v. Ethan Allen, Inc., 259 F. Supp.2d 625, 635-36 (N.D. Ohio 2003) (excluding expert testimony under Daubert where expert did not adhere to generally accepted threshold of two standard deviations); Cooper v. University of Texas at Dallas 482 F. Supp. 187, 194 (N.D. Tex. 1979), aff'd, 648 F.2d 1039 (5th Cir. 1981) ("It has become a convention in social science to accept as statistically significant values which have a probability of occurring by chance 5% of the time or less.").
In her report analyzing the termination and retention rates of 40 DC.com senior managers between January 2001 and November 2002, Dr. Sobol noted that the results have a statistical significance of 7%. Her analysis of the impact of performance ratings on the termination of senior managers is statistically significant at the 10% level. Although the correlation between performance scores and utilization rates for both terminated and retained male senior managers has a statistical significance of 2%, Dr. Sobol admits that the correlation for female senior managers, such as plaintiff, "was found to be insignificant." ( See Def. App. at 36-39).
The deficiencies in Dr. Sobol's statistical analysis pretermit consideration of defendant's other objections to Report I. However, the court notes that Dr. Sobol's testimony is not inadmissible because she failed to consider the factors cited by defendant for terminating plaintiff and relied only on data provided by plaintiff in formulating her opinions. Such objections go to the weight rather than the admissibility of the evidence.
C.
Defendant also objects to Report II, which studies the promotion history for all Deloitte Touche groups, as irrelevant. In support of this argument, defendant correctly points out that plaintiff does not assert a failure to promote claim as part of her Title VII or ADEA case. Moreover, the study performed by Dr. Sobol analyzes data from 1997 to 1999 — more than a year before plaintiff began her employment at DC.com. The court agrees that Report II is irrelevant and "will [not] assist the trier of fact to understand the evidence or to determine a fact in issue." FED. R. EVID. 702. See also Smith v. Leggett Wire Company, 220 F.3d 752, 762 (6th Cir. 2000) (statistics relating to percentage of minority supervisors employed by defendant not relevant to the issue of whether plaintiff was terminated because of race); Kier v. Commercial Union Insurance Companies, 808 F.2d 1254, 1258 (7th Cir.), cert. denied, 107 S.Ct. 1955 (1987) (statistical evidence relating to employer's hiring practices irrelevant in termination case). However, if defendant attempts to introduce evidence or argue, as it did at the summary judgment hearing, that it "has been recognized as one of the outstanding places for women to work," Dr. Sobol may offer the results of her study as rebuttal evidence.CONCLUSION
Dr. Sobol either failed to test for statistical significance or did not use the proper threshold for statistical significance in her analysis of: (1) the impact of age and gender on the termination of senior managers at DC.com; (2) the impact of utilization on performance ratings of senior managers; (3) the relationship between performance and utilization of senior managers; (4) the differences in pay between male and female senior managers; (5) the impact of performance ratings on the termination of senior managers; and (6) the correlation between performance scores and utilization rates of male and female senior managers. Moreover, Dr. Sobol's study of the promotion history of all Deloitte Touche groups is irrelevant to plaintiff's termination claim. As a result, the statistical analysis and related opinions contained in Report I and Report II are inadmissible under Fed.R.Evid. 702 and Daubert.
Defendant's motion to exclude expert testimony and expert reports is granted. Dr. Sobol will not be permitted to testify at trial regarding the statistical analysis and related opinions contained in Report I and Report II.
SO ORDERED.