IT Expert Successfully Identifies Class of Armed Servicemen Using Defendant Bank’s Data

    IT Expert Successfully Identifies Class of Armed Servicemen Using Defendant Bank’s Data
    Author:

    Court: United States District Court for the Eastern District of North Carolina, Western Division
    Jurisdiction: Federal
    Case Name: Childress v. JPMorgan Chase & Co.
    Citation: 2019 U.S. Dist. LEXIS 110396

    Facts

    The plaintiffs filed this class certification lawsuit claiming damages against the defendant for violating the Servicemembers Civil Relief Act (SCRA). The SCRA mandates that, from the date of deployment through the time of active duty, all debts incurred by members of the armed services before being called into active duty must be limited to an interest rate of 6%. Furthermore, all financial institutions repay interest above the 6% mark.

    The plaintiffs alleged that in exchange for benefits exceeding SCRA mandate, the defendant charged unlawfully high interest rates. Furthermore, unsuitable debt charges for thousands of service members allowed these illegal interest charges to inflate the main balances of servicemembers and subsequently paid compound interest on these inflated balances. The plaintiffs retained an IT expert to support their case. The defendant’s challenged the testimony of the plaintiff’s IT expert witness on the grounds of Daubert.

    The IT Expert Witness

    The plaintiffs’ expert witness was an IT specialist who opined on the putative class and estimated the damages for future class members. The IT expert witness was the head of an IT company with 20+ years of professional IT experience in data analysis, database creation, and support services for database administration.

    Before founding his own business, the IT expert worked as a database developer at Microsoft where he developed, implemented, and supported a comprehensive data warehousing system for the licensing division of Microsoft. He also served as a software developer for the Hewlett-Packard Company. The plaintiffs’ expert also had experience servicing as an IT expert witness in putative class action cases across a wide range of litigation types.

    The IT expert testified that the class was readily identifiable on the basis of the data available to the defendant. In particular, the IT expert referenced the data used to identify customers who could apply for remediation. As for class members outside the remediation timeframe, the expert claimed they could be detected because the defendant provided them with military advantages, and the defendant maintained a database that coded borrowers according to membership in its SCRA program. He further testified that an algorithm could be developed to calculate class damages based on the data available to the defendant.

    The defendant’s main challenge to the expert’s testimony was that it had no grounding in fact, and the IT expert witness relied on assumptions that were not sufficient. The defendant further objected to the opinions of the expert, arguing he did not identify specific information on which he relied, but rather, more loosely relied on data available to the defendant. The remediation eligibility criteria were different from those used to classify class members or to measure class harm, thus, the defendant contended the expert had improperly relied on its own calculations that were undertaken to identify remediation eligibility.

    Discussion

    The court found it difficult to understand how if the defendant could use an algorithm and data searches to determine which of its clients should be remediated, the expert could not carry out identical calculations using the same and probably additional data. The court noted that the fact that the defendant knew who its clients were and who were members of its SCRA scheme could not be seriously contested. Furthermore, the court observed that the defendant had access to account information, including the interest rates charged. Therefore, the court believed that the topic of discovery disputes between the parties was what limited the expert opinion at that point.

    The court concluded that the question was not whether the measurement of damages by the expert was correct, but whether his expert opinion that he was able to determine the class and quantify class damages was valid and credible. The court found that it was.

    Held

    The IT expert’s testimony was held to be admissible.

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