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January 19, 2000


The opinion of the court was delivered by: McCURN, Senior District Judge.



Since July, 1998, at times with the court's guidance, and at times without, the parties have refined, redeveloped and repeatedly analyzed various theories of calculating damages in this case. What has remained constant, however, is the parties' inability to agree upon a single methodology which should be employed to value the subject property. This disagreement is understandable given the paucity of directly relevant case law, coupled with the lack of a directly applicable methodology for the unique factual situation which this case presents: How to compensate the Cayugas, in monetary terms, for the fact that through two separate transactions with the State they were dispossessed of their ancestral land in violation of the Indian Trade and Intercourse Act, and have remained out of possession of that land for the past 204 years.

Not surprisingly, the parties turned to expert witnesses to establish the value of the subject property. Each of the three proffered real estate appraisers tackled the daunting task of property valuation in different ways. The experts' varying approaches can by succinctly described a follows. John F. Havemeyer, III, who testified on behalf of the Tribal plaintiffs, invokes a sales comparison approach. The U.S.' expert, Arvel Hale, employs a quantitative model which, in addition to real estate appraisal principles, relies upon computer science, mathematics and statistics. The appraiser upon which the State is relying, John D. Dorchester, Jr., offers yet another model; this one qualitative in nature, also incorporates appraisal principles and, among other things, relies upon economics and history.

Given this conflict as to the proper valuation methodology to be employed here,*fn3 as the court recognized in Cayuga Indian Nation v. Pataki, Nos. 80-CV-930, 80-CV-960, 1999 WL 1279338 (N.D.N.Y. Dec. 23, 1999) ("Cayuga XII"), it has an obligation to act as a "gatekeeper" to determine the admissibility of this conflicting expert testimony. Id. at *14. In fulfilling that obligation, as it is entitled to do, prior to jury selection the court conducted a seven day hearing to determine, under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), and its progeny the admissibility of the proffered testimony of the three real estate appraisers. See Kumho Tire Company, Ltd. v. Carmichael, 526 U.S. 137, ___, 119 S.Ct. 1167, 1176, 143 L.Ed.2d 238 (1999) ("The trial court must have the same kind of latitude in deciding how to test an expert's reliability, and to decide whether or when special briefing or other proceedings are needed to investigate reliability, as it enjoys when it decides whether or not that expert's relevant testimony is reliable.").


I. Qualifications

Because Messrs. Havemeyer, Hale and Dorchester were all offered as expert witnesses, at the outset the court must consider whether each of these individuals is qualified to testify as such. "The Federal Rules of Evidence permit opinion testimony by experts when the witness is `qualified as an expert by knowledge, skill, experience, training or education,' and `[i]f scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue.'" Zuchowicz v. United States, 140 F.3d 381, 386 (2d Cir. 1998) (quoting Fed.R.Evid. 702). During the Daubert hearing, each of the proffered witnesses demonstrated that they have sufficient knowledge, skill, training and education to establish themselves as experts in terms of their "specialized knowledge" as to real estate appraisal. Indeed, with one slight exception which will be discussed below, in terms of their qualifications, none of the parties seriously challenged the ability of the three proffered real estate appraisers to testify in this case. Thus, in keeping with the Second Circuit's liberal interpretation of Rule 702, governing expert testimony,*fn4 because Havemeyer, Hale and Dorchester amply demonstrated through their respective curriculum vitae, and through their testimony, that they each have a "reliable basis in knowledge and experience," so that they are qualified to testify as experts on the issue of valuation methodology herein, the court finds that all three appraisers are qualified to testify as to that issue. See Kumho, 526 U.S. at ___, 119 S.Ct. at 1175.

Before leaving the issue of qualifications, the court observes that at one point during the course of Dorchester's testimony it was implied that perhaps he was not qualified to testify insofar as he is using economic theory and statistical analyses in his valuation methodology. After hearing Mr. Dorchester's testimony, however, and after having the opportunity to more carefully review his report, particularly in those two respects, the court finds that although Mr. Dorchester is neither an economist nor a statistician, that does not mean that he is unqualified to rely upon those disciplines as part of his appraisal methodology in this case. Likewise, the fact that Mr. Hale is not a mathematician, a statistician, nor a computer scientist, does not render him unqualified to rely upon those disciplines as part of his appraisal methodology.

Given the increasingly complex world in which we live, it is a fact of modern day life that many problems cannot be resolved without taking an interdisciplinary approach. Thus, the fact that both Hale and Dorchester relied upon other disciplines in devising their respective valuation models is of little consequence in terms of their qualifications to testify, particularly where, as here, each witness demonstrated his proficiency in the use of such disciplines in the context of real estate appraisal. Accordingly, as to the qualifications of the three appraisers, the court finds that each of them have the credentials, through education, training and experience, to offer their respective opinions as to the manner in which the subject property should be valued.

II. Daubert Principles

With respect to the admissibility of expert testimony, whether scientific, or whether based upon "technical" or "other specialized knowledge," the Supreme Court has adopted a two-step inquiry in which trial judges must engage to determine "whether the reasoning or methodology underlying the [expert's] testimony is . . . valid and . . . whether that reasoning or methodology properly can be applied to the facts in issue." Daubert, 509 U.S. at 592-93, 113 S.Ct. at 2796; see also Kumho, 526 U.S. at ___, 119 S.Ct. at 1171. In other words, the purpose of a Daubert hearing is to "ensur[e] that expert testimony `both rests on a reliable foundation and is relevant to the task at hand.'" Zuchowicz, 140 F.3d at 386 (quoting Daubert, 509 U.S. at 597, 113 S.Ct. at 2799) (emphasis added).

It bears repeating that generally the admissibility of evidence must be established by a preponderance of the evidence. See Bourjaily v. United States, 483 U.S. 171, 175-76, 107 S.Ct. 2775, 2778-2779, 97 L.Ed.2d 144 (1987). In the context of the admissibility of expert opinion evidence under Daubert, as the court reminded counsel during the hearing, "it is the proponent's burden . . . to establish admissibility, rather than the opponent's burden to establish inadmissibility." Graham v. Playtex Products, Inc., 993 F. Supp. 127, 129 (N.D.N.Y. 1998) (citing, inter alia, Lust v. Merrell Dow Pharmaceuticals, 89 F.3d 594, 598 (9th Cir. 1996)). Thus, in the present case, each party had the burden of proving by a preponderance of ...

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