The Delaware Court of Chancery recently ruled that a corporation cannot be delegated as an expert witness in In Re Dole Food Co., Inc. (2015 Del. Ch. LEXIS 47). In the plaintiff’s breach of fiduciary duty case regarding a take-private action of Dole, the defendants identified Stifel, Nicolaus & Company, Inc. (“Stifel”) as their expert witness for valuation purposes. The defendants served expert reports identifying Stifel as its author with signatures from the managing director and an employee of Stifel as authorized representatives. The plaintiffs noticed a Rule 30(b)(6) deposition and questioned whether the defendants designated Stifel or its managing director as the expert during the deposition. Defense counsel objected when the managing director claimed authorship of the report, stating that Stifel was the expert.
The court explained that although many statutory provisions refer to corporations as “persons”, the Delaware Rules of Evidence clearly require a witness to be a biological person. The Rules of Evidence require testimony from personal knowledge, that the witness be able to take an oath, and that a witness may have to be sequestered in proceedings - requirements that a corporation cannot meet.
In addition to those requirements, a corporation cannot perceive facts or data, be qualified by knowledge, skill, experience, training or education, or apply reliable principles and methods to the facts of the case. Finally, a corporation could not designate an agent because no one is permitted to testify through an agent.
In order to avoid prejudicing the defendants from proceeding without an expert, the Court allowed the defendants to proceed with the managing director.
The Court concluded that the managing director has a body and a brain, and as long as he is otherwise qualified, is allowed to serve as an expert witness. The corporation on the other hand, has neither and cannot.