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The Delaware Court of Chancery recently addressed an interesting evidential question — do expert witnesses need to be human beings?
Despite the growing number of legal rights bestowed on corporations (free speech, freedom of religion, etc.), the court ruled that expert witnesses couldn’t take the witness stand.
The question stemmed from a consolidated shareholder challenge and appraisal proceeding arising out of a take-private deal involving Dole Food Co. Inc. (Dole). The defendants in the case, which include Dole founder and CEO, David Murdock, sought to call an investment bank to testify regarding the company’s value at the time of the transaction.
The plaintiffs objected, arguing that Stifel, Nicolaus & Co. Inc. could not serve as an expert witness because it is a corporation and not a human being. As argued by the plaintiffs, the distinction is important because a corporate expert witness could claim to rely on the collective knowledge and experience of all of its employees and agents, while a biological person only can rely on the more limited knowledge and experience that a living mind might accumulate.
Vice Chancellor J. Travis Laster of Delaware Chancery Court held that an expert witness must be a biological person. While acknowledging that corporations are treated as “persons” under many aspects of the law, he concluded that they cannot satisfy the definition of witness under Delaware law.
As further explained in his opinion:
Because of its lack of a body and mind, a corporation only can act through human agents. Lacking a voice, a corporation cannot testify. Lacking ears, it cannot hear. Lacking a mind, it cannot have personal knowledge or a memory to be refreshed. Lacking a conscience, it cannot take an oath or provide an affirmation. And because of its incorporeal nature, it cannot even meet Delaware’s statutory requirement that a person taking an oath do so ‘with the uplifted hand.’
Because the defendants would suffer prejudice if forced to proceed without an expert, the court ruled that the defendants could substitute the corporation’s managing director, Seth Ferguson, as their expert witness. “Ferguson has a body and brain. Assuming he is otherwise qualified, he can serve as an expert witness,” Laster wrote. “Stifel has neither and cannot.”
- Practices: Corporate Transactions & Business
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
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