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July 19, 2005.


The opinion of the court was delivered by: GABRIEL GORENSTEIN, Magistrate Judge


Plaintiff Highland Capital Management, L.P. ("Highland") brings this action against defendants, Leonard Schneider, Leslie Schneider, Scott Schneider, Susan Schneider (the "Schneiders") and Jenkens & Gilchrist Parker Chapin LLP ("JGPC") (collectively "the defendants") to recover damages based on the Schneiders' alleged failure to consummate a transaction involving promissory notes issued by McNaughton Apparel Group, Inc. ("McNaughton"). Highland alleges that the Schneiders agreed to sell it the notes but then reneged on the agreement after they received inside information that caused them to believe the notes would increase in value. In its third amended complaint, Highland has set forth a variety of claims for relief against the defendants, including breach of contract, tortious interference with contractual relations, and tortious interference with prospective contractual and business relations. Defendants now move in limine for an order excluding the testimony of Highland's proposed expert witness, Sean F. O'Shea ("O'Shea").

  As discussed below, O'Shea's proposed testimony consists of a summary of the evidence in the case from Highland's perspective, a description of federal securities laws, and an assertion that those laws were violated by various individuals. It concludes with the speculation that a federal prosecutor presented with Highland's version of the events would "likely" pursue a criminal investigation of these individuals and seek their indictment. Because this testimony is inadmissible, and because O'Shea's speculation regarding how a prosecutor would treat this case is simply irrelevant to any claim asserted by Highland, defendants' motion to exclude it in its entirety is granted.


  A. The Amended Complaint

  In its amended complaint, Highland alleges that, prior to April 15, 1998, the Schneiders owned and operated companies, Jeri-Jo Knitwear, Inc. and Jamie Scott, Inc. (collectively, "Jeri-Jo"), which made junior active apparel. Plaintiff's Third Amended Complaint (reproduced as Ex. 4 to Defendants' Notice of Motion to Exclude Proposed Expert Testimony of Sean O'Shea ("Notice of Motion")) ("Am. Compl."), ¶ 9. On April 15, 1998, McNaughton purchased substantially all of the assets of Jeri-Jo. Id. Under the terms of the deal, McNaughton made an initial payment, assumed debt, and obligated itself to make a "future earn-out payment" to the Schneiders based on the performance of Jeri-Jo over the course of the following two years. Id.

  Once Jeri-Jo was sold to McNaughton, Leonard Schneider, the patriarch of the Schneider family, ended his association with Jeri-Jo. Id. ¶ 10. Leslie, Susan and Scott Schneider (the "Schneider Children") remained as operating executives at Jeri-Jo and entered into employment agreements under which they reported directly to Peter Boneparth, the President and Chief Executive Officer of McNaughton. Id.

  On August 3, 2000, the terms of the sale agreement were amended to provide for the retirement of the future earn-out payment through a combination of cash, stock and promissory notes. Id. ¶ 13. McNaughton issued eight promissory notes totaling $69 million (the "Notes"), to the Schneiders. Id. ¶ 21.

  Highland avers that, in November 2000, an officer of McNaughton forwarded "confidential" information to the Schneiders detailing McNaughton's financial condition. See id. ¶ 18. Between January and May 2001, Leonard Schneider sold approximately 693,000 shares of McNaughton stock. Id. ¶ 39. Highland alleges that, because the McNaughton officer was aware of the volume of shares being sold and that the Schneider Children were "exiting the company," the officer "surmised" that the Schneiders were "engaged in an effort to dump their McNaughton stock. . . ." Id. ¶ 40.

  In late 2000 and early 2001, the Schneiders sought to sell the Notes. See id. ¶¶ 23-24. The Schneiders allegedly retained Glen Rauch ("Rauch") of Glen Rauch Securities, Inc. to begin marketing the Notes for sale. See id. ¶¶ 19, 23. By letter agreement dated January 5, 2001, Rauch in turn retained RBC Dominion Securities Corporation ("RBC") "to market the Notes on behalf of the Schneiders." Id. ¶ 24. After Highland was identified as a potential purchaser of the Notes, a conference call was arranged involving RBC, Rauch, JGPC (as the Schneiders' counsel), and Highland. See id. ¶¶ 19, 29; see also Affidavit of Katherine C. Ash in Support of Motion to Exclude Proposed Expert Testimony of Sean O'Shea, dated February 9, 2005 (annexed to Notice of Motion) ("Ash Aff."), ¶ 23 (explaining the various transactions in which JGPC represented the Schneiders).

  Highland alleges that, "[o]n the morning of March 12, 2001, Rauch — with the consent and on the behalf of the Schneiders — offered to sell RBC all $69 million of the Notes at 51 cents on the dollar." Am. Compl. ¶ 34. Highland also alleges that on March 14, 2001 "RBC confirmed the trade orally with Rauch." Id. ¶ 36. Highland alleges that, "subject to documentation," the trade consisted of Rauch buying "all the Notes from the Schneiders at 51 cents on the dollar and to sell approximately $45.4 million to Highland . . . at 52.5 cents on the dollar (the spread being the commission paid to RBC)." Id. The remaining $23.6 million portion of the Notes was to be sold to another purchaser — also "at 52.5 cents on the dollar." Id. At this point, according to Highland, "the parties proceeded to document the transaction and prepare for settlement." Id. ¶ 37.

  At about the same time, McNaughton, through Boneparth, had been in active negotiations with Jones Apparel Group ("Jones") for a proposed merger/acquisition. See id. ¶ 42. Highland alleges that, having learned that the Schneiders were about to trade the Notes, various officers of McNaughton met privately on March 8, 2001. Id. ¶¶ 43-44. Highland contends that, at this meeting, the officers "determined that they should inform the Schneiders . . . of the ongoing merger negotiations in order to persuade the Schneiders to forego selling the Notes" and their remaining shares in McNaughton. Id. ¶ 45. Highland also alleges that it was determined that one of these McNaughton officers "should contact [JGPC] to inform them of the information regarding the Jones transaction." Id.

  The amended complaint alleges that the McNaughton officer then contacted two attorneys at JGPC and informed them of the information concerning the McNaughton/Jones merger. See id. ¶¶ 19, 46. Highland claims that the two attorneys were then in contact with Leonard Schneider and some of the Schneider children. See id. ¶¶ 48-49. On March 13, 2001, a meeting was held at JGPC's New York office at which the two attorneys and all of the Schneiders were present, either in person or by telephone. Id. ¶ 50. Highland alleges that at this meeting, the attorneys informed the Schneiders of the possible McNaughton/Jones merger and advised the Schneiders not to sell either their McNaughton stock or the Notes. See id. ¶ 51.

  Highland alleges that, upon learning this information, the Schneiders refused to proceed with the transaction. See id. ¶¶ 51-52, 54. At that point, however, Highland claims that the trade of the Notes "had already been made." Id. ¶ 52. Jones eventually reached an agreement to purchase McNaughton and the Schneiders received payment in full for the Notes shortly after the transaction closed. See id. ¶¶ 54-55. According to Highland, the Schneiders received a "windfall" of $34 million "for backing out of their agreement to sell the Notes." Id. ¶ 55.

  B. The Answers

  In their answers, the Schneiders and JGPC deny, inter alia, that Rauch had the consent of the Schneiders to offer to sell the Notes to RBC, that the Schneiders (or Rauch on behalf of the Schneiders) agreed to sell the Notes, or that any information provided to the Schneiders by officials at McNaughton through the attorneys at JGPC was improper or used wrongfully. See Schneiders' Answer With Affirmative Defenses and Third-Party Complaint (reproduced as Ex. 5 to Notice of Motion) ("Schneiders' Answer"), ¶¶ 1, 33, 35-36, 46-48, 50; Answer of Jenkens & Gilchrist Parker Chapin LLP With Affirmative Defenses (reproduced as Ex. 6 to Notice of Motion) ("JGPC Answer"), ¶¶ 1, 33, 35-36, 46-48, 50. The defendants also asserted a variety of ...

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