District Court Finds Multiple Actuary Expert Methodologies Reliable

    Actuary Expert

    Court: United States District Court for the Eastern District of Wisconsin
    Jurisdiction: Federal
    Case Name: Merrill v. Briggs & Stratton Corp.
    Citation: 2015 U.S. Dist. LEXIS 117677

    In this class action lawsuit involving alleged violations of the Labor Management Relations Act (LMRA) and the Employee Retirement Income Security Act (ERISA), both the plaintiffs and defendants retained actuarial experts to discuss the relative value of the benefit plans in question. Although each of the experts attempted to exclude the testimony of the other on the grounds of unreliable methods, it was ultimately determined that both the experts’ methodologies were both commonly-used actuarial tools and thus, both reliable.


    Plaintiffs Michael Merrill, Gregory Weber, and Jeffrey Carpenter, retired employees of the defendant Briggs & Stratton Corporation, brought this suit against Briggs and its Group Insurance Plan under LMRA and ERISA alleging that defendants violated the parties’ collective bargaining agreement by reducing health benefits of employees who retired before August 1, 2006. The motion before the court was the cross motion for summary judgement as well as motions in limine related to the parties’ expert witnesses.

    The Experts

    The plaintiff’s retained an actuarial expert witness with experience as a senior executive, health benefits, compensation, and human resources consultancy. The defendant’s expert witness was an experienced health and pension actuary who specialized in post-retirement health benefit plans, governmental plans, accounting for postretirement benefits, Medicare Part D and Medicare Advantage, Healthcare Reform, CMS Health Care Innovation Awards.

    The biggest difference in the experts’ methodology was that the plaintiff expert calculated the relative value of the plans while the defendants expert calculated the actuarial value of the plans. The parties agreed that the actuarial value reflected the percentage of medical costs borne by the retiree while the relative value reflects the total cost of a plan to the employer. The plaintiff expert used Apex, a proprietary software tool, to calculate the relative value. On the other hand, the defendant expert used the minimum value (MV) calculator developed by the Department of Health and Human Services to calculate the actuarial value.

    The Court’s Discussion

    Both parties filed motions in limine to exclude the other side’s expert testimony based on Daubert v. Merrell Dow Pharmaceuticals. These motions boil down to a dispute over the proper methodology for calculating and comparing the actual costs of health care plans. Each expert used a different methodology for comparing Briggs’ pre-and post-2010 retiree plans and for determining whether the post-2010 benefits were reasonably commensurate with the pre-2010 benefits.

    Each side challenged the opposition as to the use of these differing methods and tools. The court rejected this argument as to both experts. Although the parties challenged each others use of the differing tools and methodologies, both parties conceded that the tools and methodologies used by both experts were generally accepted in the actuarial field. The plaintiffs conceded that the defendant’s MV calculator was a commonly-used actuarial tool, and the calculation of the actuarial value was a commonly-used methodology. The defendants also concedes that their expert had used software tools similar to the plaintiff’s to calculate relative value in the past.

    The parties also challenged each others’ experts on the materiality of the changes, arguing that the opposition’s methods were not reliable. The court also rejected this argument as to both experts. The plaintiffs expert used his knowledge and experience, and he considered several different benchmarks, some of which the defendant expert also used to form his opinion. The defendant expert used his knowledge and experience but based his conclusion on different benchmarks. Whether the benchmarks and assumptions the experts used in their analyses were reliable was deemed a jury question.


    The motions to exclude the testimony of the experts were denied. It was determined that the methodology used by both experts was reliable and commonly used in the actuary field. Thus, the court would not exclude either expert concluding, “The soundness of the factual underpinnings of the expert’s analysis and the correctness of the expert’s conclusions based on that analysis were factual matters.”