U.S. v. NACCHIO

McCONNELL, Circuit Judge, dissenting, joined by HENRY, Chief Judge, and KELLY and MURPHY, Circuit Judges.

Joseph Nacchio was convicted by a jury and sentenced to six years in prison after the district judge refused to allow his expert witness, Professor Daniel Fischel, to testify at his trial for securities violations. The judge disqualified the witness without hearing argument from defense counsel or testimony from the witness regarding the reliability of his methodology. The judge based this ruling on what is now agreed was a mistaken interpretation of the rules of criminal procedure. The panel reversed that ruling, and in its petition for rehearing en banc the government did not even attempt to defend the district court's rationale. Instead, the government argues — and the en banc majority agrees — that the exclusion of this witness was the defendant's fault, for failing to establish the foundation for his testimony in advance of putting him on the stand or to file a motion for permission to establish the foundation through testimony.

The flaw in the government's argument is that the rules of criminal procedure, unlike the rules of civil procedure, do not require a criminal defendant to establish the foundation for expert testimony through advance written submissions. Unless the criminal defendant is otherwise directed by the district court — something which did not happen here — he may establish the foundation for witness testimony by putting the witness on the stand for voir dire examination. The defendant responded properly to every motion made by the government, and nothing in the conduct of the defense can reasonably be construed as abandoning or forfeiting his right to establish the reliability of the expert evidence through testimony. It was the district judge, not defense counsel, who misunderstood the procedural rules. We dissent on the ground that the defense did everything it was required to do — but that even if counsel somehow slipped up, it was an abuse of discretion for the court to shut down the primary line of defense in a criminal case on the basis of what was at worst an understandable and inconsequential mistake.

I. Parties In Criminal Cases Are Under No Obligation To Submit Written Information Sufficient To Resolve Daubert Issues In Advance, Or To Make A Motion For Permission To Establish Admissibility By Witness Testimony

At the heart of this case is the difference between discovery practice in criminal and civil cases, which "derives from the special constitutional constraints of criminal proceedings." United States v. Mehta, 236 F.Supp.2d 150, 155 (D.Mass. 2002) (Gertner, J.). In civil cases, both sides are entitled in advance of trial to know and to respond to the evidence that will be presented by the other side, including any expert testimony. In criminal cases, the defendant is entitled to keep his cards close to the vest; he may not be required to disclose his evidence or trial strategy until after the government has presented its case. These differences are reflected in the discovery rules.

Under Rule 26(a)(2) of the Federal Rules of Civil Procedure, any party who wishes to use a retained expert must give the opposing party in advance of trial a written expert report prepared and signed by the witness, containing a "complete statement" of the witness's opinions and the "basis and reasons for them"; all data, other information, and exhibits on which the testimony is based; and the witness's qualifications, publications, previous testimony, and compensation statement. Moreover, in a civil case the opposing side is entitled to take the expert's deposition under Rules 30 and 31 and, if the expert report and deposition testimony fail to establish the reliability of the methodology, can move for summary judgment under Rule 56. If issues regarding the reliability of the expert's methodology — which we, like the majority and the parties, will call " Daubert issues" — are not resolved on summary judgment, they must be resolved through questioning the witness, either in a separate Daubert hearing outside the presence of the jury or by foundational testimony and voir dire examination on the stand prior to presentation of the witness's opinion evidence. The timing of the hearing, and whether it should be held in the presence of the jury, depend on the circumstances of the case. As the advisory committee note to Federal Rule of Evidence 104 points out: "Not infrequently the same evidence which is relevant to the issue of establishment of fulfillment of a condition precedent to admissibility is also relevant to weight or credibility, and time is saved by taking foundation proof in the presence of the jury."

In criminal cases, by contrast, neither side has a general right to discover the other's evidence, though the defendant is entitled to request and obtain certain specific types of evidence from the prosecution. Apart from Rule 16, which we discuss below, a criminal defendant may call an expert witness to the stand without any advance disclosure whatsoever. There is no requirement of an expert report; there are no depositions of the expert; there are no motions for summary judgment to test whether there are triable issues regarding the witness's methodology. As in civil cases, the proponent of an expert in a criminal case has the burden of establishing that the witness's methodology is sound under the standards of Daubert and Kumho Tire. But absent any countervailing directive from the trial court, parties in criminal cases can, and typically do, meet this burden by eliciting foundational testimony from the witness on the stand, subject to cross-examination by the opposing party. A party in a criminal case does not have to make a motion to proceed in this fashion; it is the default procedure. As in civil cases, the questioning may be conducted in a separate hearing outside the presence of the jury, by motion of either party or of the court, or at the beginning of the witness's testimony. If the opposing party wishes to obtain a ruling on admissibility in advance of the witness's testimony, it may file a motion in limine or a motion to conduct the hearing outside the presence of the jury.

The majority does not dispute that this is the typical procedure for resolving Daubert issues in criminal cases. The majority quotes the defendant's contention that "the presumptive time for establishing the reliability of the expert's testimony is on the witness stand," and cites an amicus brief filed by the National Association of Criminal Defense Lawyers (NACDL) that states that "the prevalent practice is to address Daubert issues at voir dire." Maj. Op. 1244, 1244-45 n. 10. The majority says it declines to "offer any definitive opinion" regarding how Daubert issues are ordinarily resolved, Maj. Op. 1244-45 n. 10, but it makes no attempt to dispute the defendant or the NACDL on this point. Indeed, the majority concedes that it "may have been reasonable" for Mr. Nacchio to assume "that Professor Fischel's admissibility would be established after he took the stand." Id. at 1245. The majority qualifies this concession only by noting, correctly, that the trial court has broad discretion to vary from the presumptive procedure and thus that a criminal defendant has "no entitlement to a particular method of gatekeeping by the district court." Id. at 1245.

The defendant's position on this point is consistent with the discussion of Daubert procedures found in standard authorities. See, e.g., 29 Charles Allen Wright Victor James Gold, Federal Practice and Procedure: Evidence § 6265 (1997) ("Normally a trial court will hear qualification evidence before permitting the witness to give opinion testimony. That hearing may take place either in the presence or absence of the jury, at the discretion of the court." (citations omitted)); see also Jack B. Weinstein Margaret A. Berger, Weinstein's Federal Evidence (Joseph M. McLaughlin, ed., 2d ed. 2006) § 702.02[6][b] ("Evidentiary hearings, known as Daubert hearings, are the most common method trial courts use to fulfill their gatekeeper function. . . . When the hearing occurs during trial, the court has discretion to determine whether to hold it in the presence of the jury. . . . The reliability hearing may also be combined with voir dire to test the expert's qualifications."); Goebel v. Denver Rio Grande W. R.R., 215 F.3d 1083, 1087 (10th Cir. 2000) ("The most common method for fulfilling this function is a Daubert hearing").

It is thus undisputed that the "presumptive" procedure for establishing admissibility of expert testimony is through voir dire examination of the witness on the stand, either in a separate Daubert hearing or at the beginning of the witness's testimony. But this proposition merits far more emphasis than the majority gives it. If the standard or presumptive procedure is to establish reliability through examination of the witness, it follows that the defendant is not required to make a motion asking for permission to follow that procedure. Motions are required to deviate from presumptive procedures, not to follow them. To be sure, the district court has authority to impose a different set of procedures — but Judge Nottingham did not do so in this case, or if he did, he made no mention of them prior to disqualifying the witness. And to be sure, a party can waive or forfeit his right to present a witness or to qualify him through voir dire examination — but nothing the defendant did at trial can reasonably be construed as a waiver or forfeiture. Mr. Nacchio's counsel did not expressly move to be allowed to establish Professor Fischel's admissibility on the witness stand, but given that this is the presumptive procedure, a motion to that effect was not necessary; therefore, his failure to make such a motion cannot be construed as a forfeiture. The majority has cited no case in which a criminal defendant has ever been held to forfeit his right to establish witness admissibility through voir dire examination by mere failure to file a motion asking for permission to do so; the government has cited no such case; and we have located no such case. This appears to be the first.

II. The District Court Was Wrong To Disqualify The Witness On The Basis Of The Lack Of Information About Methodology In The Defendant's Rule 16 Disclosure

We address first the district court's rationale for excluding the expert witness testimony. Although no one defends that rationale anymore, the district court's error colors the entire matter.

Rule 16 of the Federal Rules of Criminal Procedure creates an exception to the usual rule that defendants need not provide notice of their intention to offer expert witnesses. Under Rule 16(b), if a defendant requests disclosure of certain evidence and the government complies, the defendant becomes obligated to make certain disclosures in return. Specifically, if the defendant requests and receives a written summary of any expert testimony the government intends to introduce, the defendant must provide similar notice of any expert testimony he intends to use. Fed.R.Crim.P. 16(b)(1)(C). These written summaries must include a description of the witness's opinions, the bases and reasons for those opinions, and the witness's qualifications. Id. §§ 16(a)(1)(G), 16(b)(1)(C). The required "written summary," however, falls far short of the "complete statement" required of litigants in civil cases. See United States v. Mehta, 236 F.Supp.2d 150, 155-56 (D.Mass. 2002). In particular, Rule 16 does not require experts in criminal cases to provide written reports explaining their opinions or to make a written proffer containing the information required under the civil rules. In this respect, the rules are the same for government and defendant. The amicus brief for the NACDL, for instance, states that they are "unaware of any instance in which the government has provided [their] members with a Rule 16 expert notice that laid out the full Daubert justification (or anything even approaching it) for the proposed testimony." NACDL Br. 4-5.

Because the defense requested and obtained disclosure of the government's experts in this case, Mr. Nacchio was obligated to disclose his experts in return. This he did. On the date set by order of the court, defense counsel provided the requisite notice of his intent to call Professor Fischel, in full compliance with Rule 16. The disclosure identified the witness, stated his credentials, and provided a brief summary of the opinions he would present and the sources on which those opinions were based. The disclosure did not contain the "complete statement" of the witness's econometric methodology that would be necessary under the civil rules. Professor Fischel did not prepare or provide an expert report, which, as noted, is not required under the criminal discovery rules.

During trial, the prosecutor took the position that Mr. Nacchio's written summary of "the bases and reasons" for Professor Fischel's opinions had to include sufficient description of his econometric methodology to enable the district court to discharge its Daubert gatekeeping function: "Defendant has not adequately complied with Rule 16's requirements for any of the `opinions' he proposed to offer through Professor Fischel. He has not set forth the reasons and bases for his opinions. . . ." App. 418. Indeed, the government filed a lengthy motion arguing that the expert testimony should be excluded because "[t]he disclosure also does not show that Professor Fischel used a reliable methodology in reaching his opinions." Id. at 363 (emphasis added). This argument took two forms. First, the government argued that the evidence should be excluded as a "sanction[]" for the defendant's supposed violation of Rule 16. Id. at 418. Second, the government argued that because the defendant had not established the reliability of the expert's testimony in his expert disclosure, the evidence should be excluded for not having passed the Daubert test. Id. at 363 ("The disclosure also does not show that Professor Fischel used a reliable methodology in reaching his opinions. The disclosure is essentially a list of facts and conclusions — with nothing in between. There is no suggestion that Professor Fischel actually selected any reliable principles and applied them reliably to the facts, as he must.") (emphasis added). These arguments amount to the same thing, because both presuppose the defendant's obligation to make his Daubert showing in his written disclosure under Rule 16.

On April 5, defense counsel called Professor Fischel to the stand, but before he could even begin to establish the foundation for the witness's testimony, Judge Nottingham dismissed the jury and excluded the evidence in a ruling from the bench. Judge Nottingham accepted the government's Rule 16 argument, ruling that "the deficiencies under Daubert and Kumho Tire in these disclosures are so egregious that they hardly warrant the 63 pages of ink the Government has spilled in opposing the testimony." App. 3914 (emphasis added). See id. at 3917 ("The Court is concerned . . . with the methodology, which is absolutely undisclosed in this expert disclosure."). The judge ruled the expert testimony inadmissible on the ground that the defendant's written submissions on the Rule 16 issue did not contain information sufficient to establish reliability under Daubert. This closely resembles the ruling a judge in a civil case might make on summary judgment, if the written submissions by the proponent of a witness failed to provide any evidence of reliability. Judge Nottingham also supplied other reasons for excluding the evidence, including that Professor Fischel's testimony was not "relevant" or helpful to the jury. The judge specifically stated, however, that he was disqualifying Professor Fischel "primarily" on account of defense counsel's "gross defect in failing to reveal the methodology." App. 3921.

Judge Nottingham was evidently under the impression that the reliability of an expert's methodology in a criminal case must be evaluated on the basis of written reports or disclosures, as is typically done in civil cases, rather than on the basis of oral testimony, as is typically done in criminal cases. Indeed, he specifically stated that the witness disclosure requirement under the criminal rules is "pretty close to what is required in the civil area." App. 2041.

The majority purports to find the court's explanations for its ruling "ambiguous," Maj. Op. 1242, but they are not. Judge Nottingham's conclusion that the defendant had not established the reliability of Professor Fischel's methodology was unambiguously premised on the erroneous assumption that the defendant was required to disclose the methodology in his written proffer rather than to do so through testimony. See App. 3916 (basing his Daubert ruling on "[t]he defendant's only representation on this issue," which was a sentence in the defendant's response to the government's motion to exclude); id. at 3917 ("The Court is concerned . . . with the methodology, which is absolutely undisclosed in this expert disclosure."); id. at 4075 (pointing to the lack of any "methodology or reliable application of methodology to the case" in "[t]he March 29, 2007, disclosure" as the primary reason for excluding the evidence). Not only is that what Judge Nottingham said, but it is obvious from context. Unless the judge thought the defendant had to disclose the witness's methodology in his written submissions, it would have been patently irrational for him to base his Daubert determination on those submissions. We do not doubt the majority's statement that "the court's ruling was grounded in Daubert and Rule 702 methodology concerns," Maj. Op. 1243, but the point is that the court based its evaluation of those concerns solely on the written disclosures. Because the judge was wrong to believe that the disclosures had to explain the methodology, he was wrong to base his Daubert determination on those disclosures.

On appeal to this court, the defendant argued that this was a misreading of Rule 16(b), that his disclosure statement did not have to include an explanation of Professor Fischel's methodology, and thus that the absence of such disclosure of methodology was an improper basis for rendering a Daubert ruling. The government argued that Judge Nottingham was correct in his interpretation of Rule 16. This dispute over the meaning of Rule 16 was the principal issue before the panel on the expert witness question.

The panel reversed the district court's Rule 16 ruling, holding that Rule 16 does not compel the proponent of expert testimony to disclose information sufficient to demonstrate that the witness's methodology is reliable under Daubert. This portion of the holding was unanimous. See United States v. Nacchio, 519 F.3d 1140, 1173 (10th Cir. 2008) (Holmes, J., dissenting) (agreeing with the panel majority that Rule 16 "certainly did not require [the defendant] to demonstrate admissibility"). As the panel held, Rule 16 leaves criminal defendants free to present expert witnesses without satisfying Daubert in advance through written expert reports. The government's argument, if accepted, would have foisted civil discovery burdens on criminal defendants. Accordingly, the panel held that Mr. Nacchio's Rule 16 disclosure "did exactly what the law required" and the district court erred in excluding the evidence on the basis of the supposed "egregious" "deficiencies" in the disclosure. Nacchio, 519 F.3d at 1151.

In its petition for rehearing, the government abandoned its Rule 16 argument, and all parties now seem to agree that Mr. Nacchio's disclosure was sufficient under Rule 16. If Rule 16 disclosures need not include information sufficient for the court to exercise its Daubert gatekeeping function, the district court necessarily abused its discretion in basing its Daubert determination on those disclosures. It would be like dismissing a case on the ground that the complaint failed to anticipate an affirmative defense, when it was under no obligation to do so. Judge Nottingham's stated reason for excluding the evidence is therefore wrong. Accordingly, only if there existed some alternative ground for basing its Daubert ruling on the written disclosures can the district court's decision be affirmed.

III. Although The District Court Has Discretion To Require The Parties To Proffer Daubert Reliability Evidence In Some Manner Other Than Witness Testimony, It Must Inform The Parties What Procedures It Wishes To Impose

The majority offers three rationales for concluding that the district court was within its discretion when it barred the defense from establishing admissibility through witness testimony. First, the majority rests on the trial court's discretion to determine alternative procedures and argues that the defendant had notice that he was required to establish Professor Fischel's reliability in advance of the testimony. Second, the majority argues that the defendant "abandoned" his right to proceed via testimony by failing to make a motion to do so. Third, the majority claims that the defendant conceded that his Rule 16 disclosure was his "submission" on the Daubert issue. In this section we will address the first of those arguments.

The majority is correct that district courts have broad latitude to determine what procedures to employ in reaching a Daubert determination. United States v. Rodriguez-Felix, 450 F.3d 1117, 1122 (10th Cir. 2006); Goebel, 215 F.3d at 1087. But the court must provide adequate notice of the procedures so that the parties know what is expected. Procter Gamble Co. v. Haugen, 427 F.3d 727, 742 (10th Cir. 2005). It is an abuse of discretion for a district court to exclude testimony on account of noncompliance with court — imposed procedures without first informing the parties of the new procedures and giving them a reasonable opportunity to conform. Id.; see Padillas v. Stork-Gamco, Inc., 186 F.3d 412, 417-18 (3d Cir. 1999) ("[P]laintiff could not have known in advance the direction the district court's opinion might take and thus needed an opportunity to be heard on the critical issues before having his case dismissed."); In re Paoli R.R. Yard PCB Litigation, 916 F.2d 829, 855 (3d Cir. 1990) ("Having no foreknowledge of the direction that the district court's opinion might take, the plaintiffs should have been given an opportunity to be heard on the critical issues before being effectively dispatched from court."). Giving notice about changes in procedure is not "hand-holding," Maj. Op. 1244-45 n. 10; it is a fundamental element of trial fairness.

We have no quarrel with the majority's uncontroversial premise that "Mr. Nacchio had no entitlement to a particular method of gatekeeping by the district court," Maj. Op. 1245, or its conclusion that "[t]he district court's failure to proceed as Mr. Nacchio anticipated does not by itself constitute an abuse of discretion." Id. If Judge Nottingham had imposed a reasonable set of alternative procedures, the defense would have been required to follow them. He did not. One searches the record in vain for any hint that Judge Nottingham instructed the defendant that he should proceed in any fashion other than that dictated by the rules. Apart from telling defense counsel to bring his expert disclosure into compliance with Rule 16, Judge Nottingham never discussed how the defense should go about demonstrating the reliability of Professor Fischel's econometric methodology.

In its April 3 memorandum, the government requested that if the court did not exclude Professor Fischel's testimony outright, the court should schedule a Daubert hearing outside the presence of the jury "prior to the admission of such testimony." App. 421. The government also asked that Professor Fischel be compelled to provide "the reasons and bases for his opinions," presumably in writing, "in advance of such hearing." Id. The court never ruled on these requests.

To be sure, after disqualifying the witness and reprimanding defense counsel for attempting to address the issue in court, Judge Nottingham said that "[a]ny argument that you wish to make could have been put in the response," App. 3921, which might possibly be interpreted as a ruling that the defense should have established the reliability of the witness's methodology in writing in its response to the government's motion to exclude. More likely, by "argument" the judge meant legal argument as to why he should permit voir dire examination of the witness, but the precise meaning of the judge's words doesn't really matter. Judge Nottingham had given no notice in advance of the necessity of making a written proffer of the expert's methodology. The government had made a motion to compel a written proffer in advance of the testimony, but the court had not ruled on it. Indeed, the day before the government made its motion the judge had told defense counsel that in light of the rigorous schedule, "I'm not criticizing anybody for not submitting things in writing." App. 3603. Only two interpretations of these events are possible: either Judge Nottingham had not imposed any special procedures for establishing reliability, or he failed to inform the defendant that he had done so. Either way, it was an abuse of discretion to disallow the witness on this undisclosed ground.

The majority points to nothing in the record that indicates that Judge Nottingham imposed any additional procedures or notified the parties that he was doing so. That is because it did not happen. But the majority nonetheless denies that the defendant suffered "unfair surprise" when the court disallowed the expert evidence without hearing testimony from the witness. Maj. Op. 1246-47. The majority states that "Mr. Nacchio was on notice that the admissibility of Professor Fischel's testimony under FRE 702 was at issue well before the district court issued its ruling." Maj. Op. 1246. Of course he was; his counsel said as much. ("In Latin, forewarned is forearmed." App.2042.) The surprise did not pertain to whether there was a Daubert issue, it pertained to when and how the Daubert issue was to be addressed. Never, prior to disqualifying the witness, did the district judge say or even imply that the issue could not be resolved in the usual way, through voir dire examination of the witness on the stand.

The majority points to several instances in which the defense was warned that Daubert would be an issue. None of them would have led counsel to think that his right to address the question through foundational testimony and voir dire examination had been abrogated. During the March 22 hearing, the prosecutor stated that "it's my concern at least based on the way the disclosure is raised right now, there could be Daubert issues that arise with respect to certain parts of the testimony." App.2041-42. Judge Nottingham chimed in that the relevant case was probably Kumho Tire rather than Daubert. App.2042. The majority describes this as "at the very least, de facto warning of the imminent need for Mr. Nacchio to meet his burden." Maj. Op. 1246. We do not agree. Putting aside that this appears to be yet another example of the prosecutor's erroneous interpretation of Rule 16 (hence the reference to the "disclosure"), the prosecutor said only that there "could be" Daubert issues with respect to "certain parts of the testimony." In other words, the prosecution might, in the future, object to certain parts of Professor Fischel's testimony. The prosecutor's remarks can scarcely be interpreted as notice that the defense was required "imminently" to present evidence of the expert's methodology on pain of having the entirety of his testimony excluded. As to the judge's intervention, it was nothing more than a clarification of the proper case citation. This was the district court's only mention of Daubert or Kumho Tire at any point prior to his ruling disqualifying the witness.

The majority points next to the government's motion to exclude Professor Fischel's testimony, which, as it observes, "invoked Daubert and FRE 702 numerous times." Maj. Op. 1246. But the government's claim that Mr. Nacchio had failed to carry his burden to demonstrate the reliability of Professor Fischel's methodology under Daubert and Rule 702 was parasitic on its claim that Rule 16 compels disclosure of an expert's methodology in writing in advance of the testimony. The argument was that the disclosures did not satisfy Daubert or Rule 702. See Gov't Motion to Exclude, App. 363 ("The disclosure also does not show that Professor Fischel used a reliable methodology in reaching his opinions."); to similar effect see id. at 385, 388, 390, 393, 396, 398, 400, 403, 405, 407-08, 415. The defense disagreed with that interpretation of Rule 16, and rightly so. The government's legal error about Rule 16 cannot serve as notice that the defendant bears a burden it would not otherwise bear, no matter how often the error was repeated.

The cases cited by the majority provide no more support for its conclusion than does the record. On the contrary, they show just how extraordinary an outlier this decision will be. The majority first compares this case to Ralston v. Smith Nephew Richards, Inc., 275 F.3d 965 (10th Cir. 2001), in which the court ruled on summary judgment that the expert's own deposition showed that she was not qualified to opine on the matter at issue. The proponent of the evidence claimed "unfair surprise," asserting that she did not know that the qualifications of the expert would be an issue at the summary judgment hearing. Id. at 970 n. 4. The court rejected the claim of surprise on the ground that the other party had devoted an entire section of one of its memoranda in support of summary judgment to the proposition that the expert was not qualified.

These cases are not remotely similar. In Ralston, a civil case, the issue arose on the defendant's motion for summary judgment. The plaintiff must have known that the motion would be decided, as motions for summary judgment always are, on the evidence in the record. This included her expert's deposition testimony admitting her lack of qualifications. Our case is a criminal case where there have been no depositions. The expert in our case has not admitted to any lack of qualifications. The proponent of the expert testimony in our case had no way of knowing that the reliability of his expert's methodology would be evaluated on the basis of written submissions, since his only written submission was his Rule 16 disclosure. The judge in our case based his disqualification ruling on the failure of the defense to provide discovery that it was not required to provide, rather than on the expert's own admissions, as in Ralston.

The majority also relies on an unpublished opinion, Solorio v. United States, 85 Fed.Appx. 705, 709-10 (10th Cir. 2004), another civil case in which this court rejected a claim of unfair surprise in connection with the disqualification of an expert under Daubert. In Solorio, the Daubert issue was first raised in summary judgment papers and then orally argued during the summary judgment hearing, during which the district judge gave the proponent numerous opportunities to explain and defend the basis for the expert's opinions. The present case could scarcely present a greater contrast. In Solorio, the proponent failed to establish reliability through the expert report, as the civil rules require, but the district judge nonetheless gave him repeated opportunities to do so orally in court. In our case, the defendant fully complied with his discovery obligations, but the district court would not allow him to speak.

Procter Gamble Co. v. Haugen is more nearly on point. In that case, like this one, the district court rendered its Daubert disqualification ruling at a point in the litigation when the proponent of the expert testimony "had not submitted any expert reports to the district court [and] the district court had not heard any expert testimony." 427 F.3d 727, 741 (10th Cir. 2005). Unlike this case, the other side in Procter Gamble had not filed a motion to limit or exclude the evidence. This court reversed the disqualification ruling, for two reasons. First, the court concluded that the proponent of the evidence "had absolutely no warning prior to the district court's order of dismissal that the district court would be considering, let alone ruling on, the admissibility of [the expert's] testimony." Id. at 742. Second, and "relatedly," the court noted that "the district court failed to `creat[e] . . . a sufficiently developed record in order to allow a determination of whether [it] properly applied the relevant law.'" Id. (quoting Dodge v. Cotter Corp., 328 F.3d 1212, 1223 (10th Cir. 2003)) (ellipses in original) (internal quotation omitted). Because of the lack of notice, the parties had not provided the district court with "detailed briefing" on admissibility, and the district court rendered no "detailed" or "specific" findings to explain its ruling — leading this court to label the ruling "off-the-cuff," id. (quoting Goebel, 215 F.3d at 1088), and to reverse.

This case, while not identical, is similar. In both, the parties were aware that Daubert issues were in the offing and would have to be decided "at some point." Id. In both cases the record at the time the court made its ruling was inadequate to enable the court to make a proper Daubert judgment. In neither case did the parties know the issues would be decided prior to briefing, argument, and either submission of an expert report or testimony. Thus the proponents were caught by surprise. To be sure, our case is complicated by the government's erroneous Rule 16 motion; the defense certainly had notice that the court would decide the Rule 16 issue before the expert took the stand. But Mr. Nacchio had no notice that, apart from Rule 16, Judge Nottingham would take it upon himself to decide the merits of the Daubert issue "off-the-cuff," without hearing testimony or argument. In that sense, this case is similar to Procter Gamble and should be decided the same way.

The majority purports to distinguish Procter Gamble, but we think not persuasively. The majority states that "the expert admissibility issue here had been put before Mr. Nacchio multiple times," Maj. Op. 1249, as it had — but that provides no more notice that the district court would decide the admissibility question without hearing testimony than the parties received in Procter Gamble. The majority also states that "the district court's ruling offered specific support for its determination and referenced relevant filings by both Mr. Nacchio and the government," id., as it did — but because the determination was based on the assumption that the defendant had to defend the expert's methodology in his written disclosure, the district court's ruling in our case is no less an abuse of discretion than was that in Procter Gamble. Both cases involved a premature decision on the Daubert issue without notice to the parties that they could not make their showing as the rules would lead them to expect.

The majority also points to repeated "opportunities" for the defense to file a written proffer of evidence sufficient to satisfy the Daubert standards or to file a request for a hearing or continuance. Maj. Op. 1249-50, 1250-51. With 20-20 hindsight, no doubt defense counsel wishes he had taken one of these "opportunities." But viewed from the perspective of the trial as it was unfolding, defense counsel had no way to know that he needed to. Under the rules, absent a contrary directive from the district court, he was entitled to establish reliability by putting the witness on the stand. He had absolutely no reason to do anything else.

In short, the majority's first alternative ground for affirmance — that the defense failed to comply with procedures imposed by the district court in its discretion — fails either because the district court did not impose any such procedures or because, if it did, it failed to inform the parties. Either way, it would be an abuse of discretion to disallow testimony on this basis.

We obviously disagree with the majority's view that Mr. Nacchio received adequate notice that the Daubert issue would be decided before he had a chance to put the witness on the stand. But that conclusion affects only this defendant. Far more troubling is the majority's holding, relegated to footnotes and utterly bereft of any citation of authority, that the defendant was not legally entitled to notice that the district court would decide the Daubert issue in this summary fashion. See Maj. Op. 1244-45 n. 10, 1245 n. 11. That unprecedented holding will apply in all future cases, until another en banc court convenes or the Supreme Court intercedes. It is simply not true that defendants have "no right to be schooled by the district court concerning the specific means it would use to decide the motion and the timing of its planned action." Maj Op. 1245 n. 11. If the district court intends to adopt a procedure other than that set forth in the rules or familiar to the parties by custom, it must give notice. See Procter Gamble Co., 427 F.3d at 742; Padillas v. Stork-Gamco, Inc., 186 F.3d at 417-18; In re Paoli R.R. Yard PCB Litigation, 916 F.2d at 855. To deny a criminal defendant, or any party, the right to put on relevant evidence without first informing him of the means the court would use to decide its admissibility is not merely an abuse of discretion; it is a violation of due process of law.

IV. The Defendant's Reply To The Government's Motion To Exclude Did Not Constitute Abandonment Of The Right to Present Testimony In Support of Admissibility

As a second alternative ground for affirmance, the majority holds that the defendant forfeited or "abandoned" his right to present evidence in support of the reliability of Professor Fischel's methodology by his failure to request a hearing. Maj. Op. 1251-52. There are two versions of this argument. First, that "[i]f Mr. Nacchio desired an evidentiary hearing, he bore the burden of requesting one." Maj. Op. 1251. Second, that the defendant's failure to request a hearing in response to the government's April 3 "Motion to Exclude Testimony by Daniel Fischel" constituted abandonment of the right. Maj. Op. 1251-52. Both versions of the argument are unsupportable.

The majority denies that it is relying on a forfeiture argument, preferring to say that the defendant "abandoned" his right rather than that he "forfeited" it. Maj. Op. 1251-52 n. 17. This is a distinction without a difference. A forfeiture occurs when a party neglects to make an argument or assert a right at the proper time, and thus loses the opportunity to do so. See United States v. Zubia-Torres, 550 F.3d 1202, 1205 (10th Cir. 2008). The majority states that "Mr. Nacchio necessarily lost his opportunity to mount a response to the government's challenge to the admissibility of Professor Fischel's testimony on any grounds that he failed to present before the district court ruled." Id. at 1251-52 n. 17 (emphasis omitted). That is a forfeiture: to say that a party loses his "opportunity" to exercise a right or make an argument if he "failed to present [it]" at the proper time is to say he forfeited it. Cf. Macsenti v. Becker, 237 F.3d 1223, 1231 (10th Cir. 2001) ("We are convinced that Defendant forfeited the opportunity to subject the expert testimony of Dr. Sullivan and plaintiff's other experts to a Daubert challenge by failure to make a timely objection before that testimony was admitted.").

The majority's assertion that "[i]f Mr. Nacchio desired an evidentiary hearing, he bore the burden of requesting one," Maj. Op. 1251, is accompanied by neither a citation of authority nor an argument. Moreover, it is logically inconsistent with the proposition, which the majority does not even attempt to dispute, id. at 1244-45 n. 10, that the presumptive means of establishing reliability is through questioning the witness on the stand. See pages 1260-62, above. Motions are required when a party wishes the court to employ an alternative procedure, not when it wishes to proceed in the presumptive fashion. Moreover, to be precise, Mr. Nacchio did not desire a separate " Daubert hearing"; his assumption was that he would establish the reliability of the expert's methodology by putting Professor Fischel on the stand and eliciting testimony about his methodology. A criminal defendant does not have to make a motion for permission to do this. He simply calls his witness to the stand and does whatever is necessary under the circumstances to establish admissibility. Defense counsel's failure to file a formal motion for a "hearing," therefore, cannot be construed as a forfeiture or abandonment of his right to put on the witness.

Nor did the defendant's failure to request a hearing in response to the government's "Motion to Exclude Testimony by Daniel Fischel" constitute a forfeiture. The government's 61-page motion argued primarily that the defendant's Rule 16 disclosure was inadequate, and that the expert should be excluded on that ground. App. 362-63; see id. at 418 (arguing that exclusion was an appropriate "sanction" for the defendant's failure to "obtain an adequate expert report"). With respect to each of the issues on which Professor Fischel planned to opine, the motion pointed out that the defendant's Rule 16 disclosure did not set forth any description of the methodology Professor Fischel employed, and argued that this was grounds for exclusion. Id. at 385, 388, 390, 393, 396, 398, 400, 403, 405, 407-08, 415. This aspect of the motion, therefore, was nothing more than a repackaging of the argument that the defense was required to disclose methodology in the Rule 16 disclosure. The motion also argued that the evidence was inadmissible on a number of other grounds under Rule 702, which are not defended by the majority and are therefore not relevant. These included: that Professor Fischel's testimony would be a statement of alleged facts, that his testimony would not be outside the jury's ordinary range of knowledge, that his qualifications were not relevant to the particular opinions, and that his testimony might confuse or mislead the jury. The government argued that because of these flaws, along with the Rule 16 deficiencies, the testimony could be excluded as a matter of law without the necessity of a hearing. Then, on the penultimate page of the motion, the government stated: "If, however, the Court is inclined to allow any portion of the proposed expert opinion testimony discussed above based on the disclosures to date, the United States respectfully requests a hearing prior to the admission of such testimony in order to challenge its admissibility out of the presence of the jury." Id. at 421. The government "request[ed] that in advance of any such hearing, Professor Fischel should provide the reasons and bases for his opinions." Id.

The next day, the defense filed a 7-page "Reply to United States Motion to Exclude Testimony by Daniel Fischel." The first section of the reply defended the defendant's expert disclosure under Rule 16, accurately setting forth the requirements of the rule and showing that the disclosure was in full compliance. The second section of the reply addressed the admissibility arguments the government made under Rule 702, such as whether Professor Fischel's opinion was the product of specialized knowledge, whether it was relevant, and whether it would assist the jury in understanding the evidence. The third section defended Professor Fischel's qualifications. The reply did not make explicit reference to the government's request for a Daubert hearing in the event these arguments for outright exclusion did not carry the day. The reply concluded with the request "that United State's [sic] Motion to Exclude Testimony by Daniel Fischel be denied." App. 468. We believe that this reply was adequate under the circumstances and that the majority is wrong to hold that it "abandoned" the defendant's right to present testimony in support of the reliability of Professor Fischel's methodology.

With regard to the government's argument that the disclosures did not establish the reliability of Professor Fischel's methodology, the reply was fully responsive, even though it did not persuade the district court. The reply showed, correctly, that the defendant's Rule 16 disclosure was sufficient. It did not, of course, even purport to establish the reliability of Professor Fischel's methodology; its point was that there was no legal requirement that the Rule 16 disclosure do so. Because Rule 16 did not require the disclosure to establish reliability, the government's arguments based on the lack of any "indication" in the disclosure that the expert employed a reliable methodology were without merit. As noted above, no one now defends the government's contention on this point.

The reply also addressed the government's most serious arguments regarding other admissibility issues under Rule 702. This also did not persuade the district court. As part of his explanation for disqualifying the witness, though not the "primary" reason, Judge Nottingham held that Professor Fischel's testimony was not relevant and would not be helpful to the jury. App. 3919. On appeal, the panel considered this rationale on the merits and rejected it. Nacchio, 519 F.3d at 1155. The government did not seek review of that holding in its petition for rehearing, it was not within the questions posed by the court for en banc rehearing, and the majority does not rely upon it.

That leaves the government's request for a separate Daubert hearing out of the presence of the jury. The defendant's reply made no reference to that request, and it is not improbable that this is because the defense agreed with, or at least was indifferent to, the suggestion. It follows that the defendant forfeited any right to object to a Daubert hearing. But the defendant certainly did not forfeit or abandon any right to object to having the Daubert decision rendered without either a separate hearing or an examination of the witness at the beginning of his testimony. The government had not moved for any such thing, except on the legal grounds discussed above, to which the defense adequately and correctly responded. Silence regarding a request for a hearing cannot be construed as silence regarding denial of a hearing.

Indeed, the government stated in its motion that if the court did not disqualify the witness under Rule 16, "the Court would likely need to hold an evidentiary hearing." App. 420. In the face of that admission, the defendant had no reason to doubt that, if the Rule 16 and other evidentiary issues were properly decided, a hearing would take place on the Daubert issues. Contrary to the majority, the defendant had no need to "second" the government's motion for a Daubert hearing. Maj. Op. 1247-48 n. 14. If a party does not oppose the other side's motion, he need not respond.

The majority suggests, however, that a combination of one sentence in the introduction to the reply and the prayer for relief at the end of the reply "plausibly could be read as both opposing the government's hearing and inviting the court to rule on admissibility without further proceedings." Maj. Op. 1253. We do not see how. The introductory sentence quoted by the majority reads in its entirety: "The government's arguments are without merit." App. 463. The prayer for relief reads: "For the reasons set forth above, Mr. Nacchio respectfully requests that the United State's [sic] Motion to Exclude Testimony by Daniel Fischel be denied." App. 468. Nothing in between makes any reference to the possibility that the court might make its Daubert ruling "without further proceedings." As already noted, the government had not made any such suggestion. Judge Nottingham did not base his ruling on any such interpretation of the defendant's reply, and if he had done so, it would surely have been an abuse of discretion. It cannot serve as an alternative ground for affirmance.

V. The Defendant Did Not Concede That His March 29 Disclosure Should Be Treated As His Daubert Submission

As a final attempt to justify the district court's refusal to allow the defense to establish the witness's reliability through hearing or testimony, the majority leaps on a sentence in the defendant's filing concerning rebuttal testimony, and attempts to argue that this was an admission that the defendant "considered his revised Rule 16 disclosure to be a submission on Professor Fischel's methodology," Maj. Op. 1249 n. 15; id. at 48-49, citing Aplee Supp. En Banc App. 50. The theory seems to be that if the defense "considered" its Rule 16 disclosure statement as a submission on the Daubert issue, the district court was entitled to treat it as such, and to make the Daubert determination on the basis of the disclosure without further proceedings. See Maj. Op. 1240 n. 6. (arguing that the defendant thereby "tacitly acknowledged the legitimacy" of the district court's decision to decide the Daubert question on the basis of the written disclosures).

This interpretation has no support in the record. First, whatever the defendant may have said in his response on the rebuttal issue, that response was filed three days after the district's court's ruling excluding the Fischel testimony without a hearing. It therefore could not have been the district court's reason for proceeding as it did. At the time of that ruling, the defendant had said nothing that could be construed as an invitation to regard the Rule 16 disclosure as a Daubert submission.

More importantly, the majority's interpretation of the defendant's statement is completely unjustified. Since the majority does not quote the defendant's words, we will do so: "The government has had Professor Fischel's opinion and methodology on this opinion since March 29, 2007 (see Defendant's Expert Disclosure ¶ 7). Thus, it is hard pressed to claim surprise." Aplee Supp. En Banc App. 50. This says, plainly, that the disclosure precluded any "surprise" to the government that the testimony would be presented; it does not identify the disclosure as a "submission" regarding the reliability of the testimony under Daubert. Rule 16(b) required the defendant to provide a "written summary" of the "basis and reasons" for his expert's opinions. Mr. Nacchio's counsel did so on March 29, which is why the government could not claim "surprise." But as we have explained, and the majority does not contest, Rule 16(b) does not require the disclosure to contain a "complete statement" of the expert's methodology so as to demonstrate admissibility, and Mr. Nacchio's disclosure did not purport to do so. The majority is therefore wrong to treat this reference to the March 29 disclosure as an admission that it contained an explanation of methodology sufficient to permit the district court to decide the Daubert issue.

The majority uses this mistaken claim of a concession to avoid the real issue in this case, which is not whether the disclosures adequately established reliability, but whether it was an abuse of discretion to decide the Daubert issue on the basis of the disclosures alone, without hearing or testimony. The majority conducts its entire analysis of whether the district court abused its discretion as if the issue in this case were whether the defendant's disclosures as of April 5 were sufficient to satisfy the Daubert test. See Maj. Op. 1256-59. But the defendant does not contend, and never has contended, that his written disclosures established reliability. The majority's discussion of that "issue" is an exercise in misdirection. The question is whether the district court was correct to cut the defendant off, and exclude the witness, without allowing defense counsel time to establish reliability through voir dire examination. Because Rule 16 did not require the defendant to establish reliability through written submissions, because the district court did not instruct the defendant to do so as an exercise of its discretion to depart from usual procedures, and because the defendant did not forfeit or abandon his right to establish reliability through hearing or testimony, the decision below must be reversed.

VI. Even If The Defendant's Reply To The Government's Motion Were Somehow Deficient, It Was An Abuse of Discretion To Impose The Extreme Sanction of Disallowing A Criminal Defendant's Key Witness

Even assuming, for sake of argument, that the defendant was under an obligation to "request a hearing" to establish admissibility of the expert witness through examination on the stand, we believe it would have been an abuse of discretion for a district court to impose the extreme sanction of disqualifying a criminal defendant's principal witness on account of this omission. See United States v. Harvey, 117 F.3d 1044, 1048 (7th Cir. 1997) (reversing conviction because, in the absence of any "clearly-established rule or duty" violated by the defendant, the "drastic sanction" of precluding a witness was "unwarranted").

Criminal defendants have a constitutional right to present admissible evidence, and exclusion of a defendant's evidence on account of trial errors is a drastic sanction, reserved for only the most serious cases. It is an abuse of discretion for the trial court to exclude important defense evidence on account of discovery violations, such as inadequate disclosure under Rule 16, unless those violations seriously affect the trial. Short v. Sirmons, 472 F.3d 1177, 1188 (10th Cir. 2006) ("Where the discovery violation is not willful, blatant or calculated gamesmanship, alternative sanctions are adequate and appropriate." (citation omitted)); cf. Young v. Workman, 383 F.3d 1233, 1239 (10th Cir. 2004) ("Where a party has failed to comply with a discovery request, and the failure is `willful and motivated by a desire to obtain a tactical advantage' at trial, then exclusion of the evidence `is entirely consistent with the purposes of the Compulsory Process Clause' of the Sixth Amendment." (quoting Taylor v. Illinois, 484 U.S. 400, 415, 108 S.Ct. 646, 98 L.Ed.2d 798 (1988))). The same is true of less serious trial errors, such as defense counsel's "unwise[]" failure to "second" the government's motion for a Daubert hearing. Maj. Op. 1247-48 n. 14. As Justice Breyer has commented, it is "essential" in this context that "the courts administer the Federal Rules of Evidence in order to achieve the `end[s]' that the Rules themselves set forth, not only so that proceedings may be `justly determined,' but also so `that the truth may be ascertained.'" Gen. Elec. Co. v. Joiner, 522 U.S. 136, 149, 118 S.Ct. 512, 139 L.Ed.2d 508 (1997) (Breyer, J., concurring) (citations omitted). Nothing about the circumstances here suggests that exclusion of Mr. Nacchio's key witness was an appropriate or proportionate response to defense counsel's omission.

First, it was surely understandable, even if it was not correct, for defense counsel to assume that he would have the opportunity to establish the admissibility of the expert evidence through witness testimony. The majority explicitly notes that this assumption "may have been reasonable." Maj. Op. 1245. The government shared this reasonable assumption. App. 420 (stating that if the court did not disqualify the witness under Rule 16, "the Court would likely need to hold an evidentiary hearing"). No case (at least not one that has been cited, or that we have discovered) has ever held that a criminal defendant's expert may be excluded merely because defense counsel did not move for permission to establish admissibility on the stand.

Second, far from being calculated to obtain tactical advantage, defense counsel's slip-up was wholly without consequence. The mistake on which the majority relies was counsel's failure to move for a hearing in response to the government's motion to exclude, or to "second" the government's motion for a hearing. Yet the record demonstrates that this omission was of no benefit to the defense, did not delay the trial, and did not change the course of the trial in any way. The night before Professor Fischel was scheduled to take the stand, the district judge had not yet looked at the government's motion to exclude. App. 3834. The next morning, in court, Judge Nottingham asked the prosecutor who was going to cross-examine Professor Fischel, App. 3870, which indicates that at this point the judge assumed that Professor Fischel would testify, notwithstanding defense counsel's failure to file a motion to that effect. The government expressly acknowledged that, unless the court agreed with its Rule 16 or other admissibility arguments, Professor Fischel would be called to the stand. App. 420. That is why the government needed to file a motion asking the court to schedule a separate Daubert hearing, away from the jury, in advance of the testimony. No one acted on the assumption that, because defense counsel had not requested a hearing in writing, the witness would be disqualified. Whether the defense asked to proceed by testimony in its reply to the government's motion or would do so orally when Professor Fischel took the stand was of no practical significance.

Third, as the Supreme Court explained in Koon v. United States, 518 U.S. 81, 100, 116 S.Ct. 2035, 135 L.Ed.2d 392 (1996), "[t]he abuse-of-discretion standard includes review to determine that the discretion was not guided by erroneous legal conclusions." Judge Nottingham's exercise of discretion with respect to defense counsel's failure to file a written motion for a hearing is inseparable from his legal errors regarding Rule 16 and the relevance of economic expertise. In determining whether to disqualify the witness for counsel's misstep, it would surely be significant to the judge that, in his eyes, the defendant had made "egregious" and "gross" failures to comply with his disclosure obligations, rather than merely having omitted to make a written motion — the sort of failing Judge Nottingham had seemed to say he would not criticize. App. 3603.

Even more so, the judge must have been influenced by his conclusion that, quite apart from methodology, the evidence excluded was irrelevant and would be confusing to the jury. In his explanation of his disqualification ruling, Judge Nottingham articulated a contempt for expert economic evidence that raises serious questions about any exercise of his discretion in this matter. He described Professor Fischel's proposed testimony — without knowing anything more about it than was described in the cursory "written summary" required under Rule 16 — as "a waste of time" that would "mislead the jury" by "inviting the jurors to abandon their own common sense and common experience and succumb to this expert's credentials." Id. at 3919, 3920. He said, among other things, that the jurors had no need of expert evidence in determining whether Mr. Nacchio had an "economic incentive to trade or not trade on inside information here," App. 3917; that analysis of the defendant's trading patterns was "essentially irrelevant," id.; that economic analysis "is within the common knowledge of the jury," id. at 3918; that an analysis of whether Mr. Nacchio's sales could be explained on the basis of the "economics of diversification" is "a piece of elucidation we really don't need here," id.; and that a comparison of Mr. Nacchio's trades to those of other CEOs or Qwest directors at the same time, who lacked Mr. Nacchio's inside information, is "almost preposterous." Id. at 3919. He opined that expert evidence is no more necessary in a complex securities matter than in "a simple negligence case." Id. at 3841. These statements are in sharp conflict with the advisory committee note to Federal Rule of Evidence 702, which describes "the venerable practice of using expert testimony to educate the factfinder on general principles," specifically mentioning as an example "how financial markets respond to corporate reports."

On appeal the panel held that the district's court's exclusion of the evidence on the ground that economic analysis is irrelevant and misleading in a securities case of this sort was an abuse of discretion. Nacchio, 519 F.3d at 1156. The government did not petition for rehearing to review the panel's conclusion on this point, and the majority does not breathe a word in support of the district court's dismissive view of economic analysis. That the district court erred in this respect is therefore undisputed. Because the district court's exercise of discretion was "guided by [these] erroneous legal conclusions," the defendant is entitled to reversal. Koon, 518 U.S. at 100, 116 S.Ct. 2035.

The majority disregards the district court's erroneous view of the relevance of economic evidence on the ground that "review of this . . . issue was not sought on en banc rehearing." Maj. Op. 1243 n. 9. That is upside-down. The panel explicitly reversed the district court's relevancy ruling, and the government's decision not to seek rehearing on that issue means that holding is now undisputed. It does not make the holding disappear. Even though the panel's opinion was vacated, as the majority points out, id., the district court's errors were still errors; no one defends them. Unless the errors were harmless, see United States v. Labastida-Segura, 396 F.3d 1140, 1143 (10th Cir. 2005), they necessitate reversal of the district court's decision.

The majority also seems to suggest that the district court's relevancy ruling is outside the scope of this en banc proceeding. Maj. Op. 1243-44 n. 9. Not so. One of the issues posed in the en banc order was whether the district court "abuse[d] its discretion in disallowing the evidence." United States v. Nacchio, 535 F.3d 1165 (10th Cir. 2008) (order granting petition for rehearing en banc) (quoted at Maj. Op. 1236 n. 1). This court has held time and time again that a district court abuses its discretion if it applies the wrong legal standard. E.g., Westar Energy, Inc. v. Lake, 552 F.3d 1215, 1224 (10th Cir. 2009); RoDa Drilling Co. v. Siegal, 552 F.3d 1203, 1208 (10th Cir. 2009); United States v. Ramirez, 304 F.3d 1033, 1035 (10th Cir. 2002); Dominion Video Satellite, Inc. v. EchoStar Satellite Corp., 269 F.3d 1149, 1153 (10th Cir. 2001). In its explanations for the evidentiary ruling, the district court made at least two glaring legal errors, which no one — neither the government nor the majority — now defends. First, confusing the civil and criminal discovery rules, the court held that the defendant's Rule 16 disclosures were egregiously deficient because they failed to set forth the expert's econometric methodology. App. 3914, 3917. Second, the court held that expert economic testimony in this case would be irrelevant and a waste of time. Id. at 3917-20. The abuse of discretion issue brings these errors squarely before this en banc court. That the court's decision to exclude the evidence was based in significant part on these errors of law renders the ruling an abuse of discretion.

The majority does not defend the district court's holdings on these points; it all but ignores them, and conducts its analysis of abuse of discretion without taking them into consideration. See Maj. Op. 1256-59. The majority offers no explanation why it regards the legal errors that informed the district court's decision as "not germane." Id. at 1244 n. 9. It simply declares them so.

It is black letter law that a district court's legal errors are relevant to whether it abused its discretion. Koon, 518 U.S. at 100, 116 S.Ct. 2035; Westar Energy, 552 F.3d at 1224; RoDa Drilling, 552 F.3d at 1208; Ramirez, 304 F.3d at 1035; Dominion Video Satellite, 269 F.3d at 1153. Judge Nottingham certainly regarded the supposed disclosure deficiencies and irrelevance of economic analysis as material to his evidentiary ruling. He said so, repeatedly. The judge explained that he was disqualifying Professor Fischel "primarily" on account of defense counsel's "gross defect in failing to reveal the methodology" in the disclosures. App. 3921. The other principal reason he gave for the decision was the "irrelevan[ce]" of economic testimony. Id. at 3919. When he refused to allow Professor Fischel even to testify in rebuttal, the judge repeated these two rationales: that "[t]he March 29, 2007, disclosure contained no methodology or reliable application of methodology to the case," id. at 4075, and "even if it were reliable, the Court remains of the conclusion that the testimony is of no relevancy." Id. at 4075-76. We are baffled that an appellate court could declare certain reasons not "germane" when those were the reasons given by the district court for its decision.

Even apart from Judge Nottingham's own words, the relevance of his legal errors to the evidentiary ruling is obvious. As we have already noted, in determining whether counsel's procedural derelictions should result in disqualification of the criminal defendant's key witness, it must necessarily have been significant to the judge that they constituted (he thought) "egregious" and "gross" violations of the defendant's disclosure obligations. Similarly, Judge Nottingham's notion that economic testimony is misleading and a waste of time must have influenced his ruling. A court must balance any procedural omission regarding the introduction of evidence against the importance of that evidence to the truth-seeking function of the trial. If the court regards the testimony as a "waste of time," this must necessarily affect its assessment of the balance. Indeed, if the court did not take into consideration the seriousness of the procedural infraction and the importance of the evidence to the defense, it would likely be an abuse of discretion. Those are among the most important factors the court is supposed to consider. See United States v. Bahamonde, 445 F.3d 1225, 1231 (9th Cir. 2006) (listing factors a district court must consider before excluding a defense witness's testimony); Short v. Sirmons, 472 F.3d 1177, 1188 (10th Cir. 2006) (noting the importance of whether the procedural infraction was "willful," "blatant," or in "bad faith"); Fendler v. Goldsmith, 728 F.2d 1181, 1188 (9th Cir. 1983) (describing the importance of the witness as the "most significant" consideration). If the considerations that guided the court were based on incorrect understandings of the law, as these were, the court's exercise of discretion was necessarily distorted.

Discretion involves a sense of proportion. Not every violation of procedural rules warrants the nuclear option of disallowing the defense to present its case. As the Seventh Circuit observed in Harvey, "[t]he stakes in criminal prosecution are always high, and defendants' Sixth Amendment rights must be protected to ensure that the truth is ultimately found." 117 F.3d at 1048. We cannot regard the sanction here as proportionate to the procedural omission, which was both understandable and inconsequential. It strongly appears that the district court's exercise of discretion was affected by its unsupportable views regarding Rule 16 and the value of economic expertise. We have nagging doubts about the district judge's sense of fairness toward this defendant. If the decision here was not an abuse of discretion, we wonder what one would look like.

The defendant complied with the rules of criminal procedure. The district court's ruling to the contrary was based on a confusion between civil and criminal discovery rules. Although the district court had discretion to impose its own procedures for litigation of the Daubert issue, it did not do so, or if it did, it failed to inform the parties so that they could conform to the new procedures. The defendant's response to the government's motion to exclude cannot be interpreted as a forfeiture or abandonment of his right to establish the admissibility of the evidence through the expert's testimony, either at the start of the witness's testimony or in a separate Daubert hearing outside the presence of the jury, as had been requested by the government. But even if defense counsel was derelict in failing to file a written motion for a Daubert hearing, it was an abuse of discretion for the district court to exclude the defendant's key testimony for that reason. We therefore respectfully dissent.

KELLY, Circuit Judge, dissenting.

It is indeed unfortunate that the court chooses expediency over due process. It is equally unfortunate that the court attempts to spin the facts to elevate a Rule 16 challenge to one based upon Daubert and Fed.R.Evid. 702. That Mr. Nacchio's counsel should have had the prescience to anticipate the trial court's mercurial procedure is unsupported by the record, and unsupportable. Although the court suggests that there were numerous opportunities to have (a) provided more argument and evidence on methodology, (b) requested a hearing, or (c) requested a continuance, all of these suggestions presuppose that a rational lawyer would anticipate that a criminal trial court would (1) misunderstand the scope of what is required under Rule 16, (2) employ a variant procedure for the admissibility of crucial expert testimony, and (3) not notify the parties of this procedure.

Moreover, given the tone of this trial, it is quite likely Mr. Nacchio's counsel would have been prohibited from doing exactly what the court suggests he should have done. Culminating with the remark that "it's [not] an interactive process where you get to argue later on," App. 3921, Mr. Nacchio was prevented from calling his main witness and then deprived of the right to put on an effective defense. To the extent that the court suggests that the trial court gave Mr. Nacchio every opportunity by waiting to rule until Dr. Fischel was actually called, nothing could be further from reality. As noted by this court, the district court knew that the parties were awaiting a ruling on the Rule 16 motion and deliberately declined to rule until the very morning Dr. Fischel was to testify. This becomes even more egregious when placed in the context of how the trial court proceeded after the second Rule 16 disclosure. In the middle of a complex criminal trial, the government filed a 63-page motion clearly aimed at the Rule 16 disclosure; the defense was given overnight to respond, and a ruling not based on the taking of any evidence or listening to any argument was rendered the next morning. Counsel then was denied an opportunity to confront the underlying basis of the ruling. Our founders must have had similar scenarios in mind when they wrote "nor shall any person . . . be deprived of life, liberty, or property, without due process of law. . . ." U.S. Const. amend. V. We reverse judgments when a district court exercises its discretion on a material matter based upon an incorrect view of the law and when a defendant has not been given an adequate opportunity to be heard — that is what happened here. I would reverse and remand for a new trial. I join Judge McConnell's dissent.

HENRY, J., dissenting, joined by KELLY, Circuit Judge:

I join the dissent of Judge McConnell that fully covers these matters. However, I feel strongly enough to add a few thoughts of my own.

This was not an easy case. Following a sixteen-day trial, involving a massive 42-count indictment, a jury deliberated for six days prior to reaching a decision. Yet, the district court, seemingly driven by some internal time schedule, deprived Mr. Nacchio of his key expert witness, Professor Daniel Fischel. Professor Fischel would have testified in this complex case on an issue that is a specific example of the very testimony contemplated by Rule 702. See McConnell Dissent at 1274-75.

While the majority declares that the district court "made clear [its] need for some proffer of data or literature underlying [Professor Fischel's] assumptions and conclusions," Maj. Op. at 1251, the majority acknowledges that the district court made "ambiguous" and "enigmatic" references. See id. at 1242-43. The subsequent multi-page explanation of the district court's ambiguous directions belies that the district court was clear; indeed, the fact that Mr. Nacchio's experienced team of lawyers, as well as a few judges of this court, missed the district court's "enigmatic" direction suggests a certain opacity.

The majority would have us believe Mr. Nacchio's lead counsel simply and inexplicably failed to perform the basic task of qualifying the witness, for no good reason. According to the majority, the defense knew what was necessary and had a number of opportunities to qualify the witness, but instead did nothing. This is highly unlikely. Far more likely, in my opinion, is that the defense was blind-sided: defense counsel expected to be able to qualify the witness in the usual way and was never told otherwise — only to find out, too late, that the district judge had made up his mind on the basis of the skeletal disclosure statement, and had decided to exclude the witness without hearing argument or testimony. If the majority is correct that the defense had notice that it had to present the expert's methodology in writing, or had to file a motion, then why did counsel not do so?

It would not have been difficult to establish the admissibility of Professor Fischel's expert testimony. Indeed, Professor Fischel has provided expert testimony on financial and securities issues at least 200 times, including for the government. See Aplt's Br. of October 9, 2007, at 40. I know of no court that has ever excluded his testimony.

Of course, eminent scholarship alone does not guarantee admissibility. Mr. Nacchio was also required to comply with the rules of evidence, and, in particular, Rule 16. His Rule 16 disclosure provides the requisite summary of Professor Fischel's opinions, and the bases and reasons for those opinions: Professor Fischel was expected to testify that, among other things, based upon his analysis of the economic evidence, Mr. Nacchio's stock sales during the disputed period were not based on material non-public information. Def's filing of March 29, 2007, at 3. To reach this conclusion, Professor Fischel engaged in

(i) a comparison of the magnitude and timing of the Questioned Sales with the magnitude and timing of Mr. Nacchio's sales in prior periods; (ii) a comparison of the magnitude and timing of the Questioned Sales with public statements by Mr. Nacchio and requests made by the Qwest Board as to how and when sales should occur; (iii) the relationship between the magnitude of the Questioned Sales and Mr. Nacchio's saleable holdings; (iv) a comparison of the Questioned Sales with other contemporaneous stock transactions by Qwest; (v) an analysis of whether the Growth Share Payment created any incentive to trade on the basis of inside information; (vi) stock sales by other Qwest insiders in the period in which the Questioned Sales occurred; and (vii) stock sales by senior executives of other companies in the period. . . .

If the district court had any doubts about the reliability or relevance of this testimony, all it had to do was allow the defense and the prosecution to question Professor Fischel and thus compile a record. This would not have taken much time and could have been done out of the presence of the jury, as the government asked.

In Anglo-American jurisprudence, the goal is to admit all relevant, reliable, and useful evidence. The judicial process reflects this goal — our rules of evidence have a "liberal thrust." Beech Aircraft Corp. v. Rainey, 488 U.S. 153, 169, 109 S.Ct. 439, 102 L.Ed.2d 445 (1988). The rules on expert testimony are "notably liberal." Krist v. Eli Lilly Co., 897 F.2d 293, 298 (7th Cir. 1990) (citing Fed.R.Evid. 702). When Fed.R.Evid. 702 was amended to account for the Supreme Court's decision in Daubert, the Advisory Committee emphasized that "the trial court's role as gatekeeper is not intended to serve as a replacement for the adversary system." Fed.R.Evid. 702 advisory committee's note (citing United States v. 14.38 Acres of Land Situated in Leflore County, Mississippi, 80 F.3d 1074, 1078 (5th Cir. 1996)). Instead, "[v]igorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence." Id. (citing Daubert v. Merrell Dow Pharms., 509 U.S. 579, 595, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993)). Thus, under Fed.R.Evid. 702's codification of Daubert, the general rule of liberal admission of proper evidence is retained. The role of the district court is that of a gatekeeper, a tender or monitor who liberally allows the entrance of proper evidence; it is not a portcullis, excluding qualified patrons for indeterminate reasons.

Although, as Judge McConnell points out, we review a district judge's ultimate decision to admit or exclude expert testimony for an abuse of discretion, we review de novo whether the district court performed its gatekeeper function and applied the proper legal standards in doing so. Dodge v. Cotter Corp., 328 F.3d 1212, 1223 (10th Cir. 2003). In evaluating the conduct of the district court, it is important to keep in mind context — the purpose of trial is to ascertain the truth. See Maryland v. Craig, 497 U.S. 836, 857, 110 S.Ct. 3157, 111 L.Ed.2d 666 (1990) (discussing the "truth-finding function of the trial itself" (citing Coy v. Iowa, 487 U.S. 1012, 1032, 108 S.Ct. 2798, 101 L.Ed.2d 857 (1988) (Blackmun, J., dissenting))). The United States Constitution, and in particular the Sixth Amendment, protect and support the "truth seeking goal" of criminal trials. Id. Thus, the trial judges, as evidentiary "gatekeepers," must screen and balance the evidence. See, e.g., Kumho Tire Co. v. Carmichael, 526 U.S. 137, 145, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999).

We, as an appellate court, are charged with reversing district court judgments that are "arbitrary, capricious, whimsical or manifestly unreasonable." Dodge, 328 F.3d at 1223 (internal quotation marks omitted). And, reviewing the district court's ultimate determination of whether to admit or exclude testimony under the proper legal standard for abuse of discretion, I would reverse. It was plainly wrong for the district court to make its Daubert determination on the basis of a Rule 16 disclosure alone. And it was plainly wrong for the district court to deny the defendant the right to establish admissibility without prior, clear notice of how he was supposed to proceed.

The district court's draconian decision to exclude Professor Fischel as an expert flies in the face of the truth-finding goals of trial, the constitutional safeguards to a full defense, the liberal thrust of the rules of evidence, and amounts to exactly the type of manifest unreasonableness we, as a reviewing court, should reverse.

And, though I fear for today's result, I do not believe this case is over. If "the district judge made clear his need for some proffer of data or literature underlying the expert's assumptions and conclusions, [and] the defense offered practically nothing, despite repeated opportunities to do so," Maj. Op. at 1251, (citing United States v. Brien, 59 F.3d 274, 277 (1st Cir. 1995)), then defense counsel behaved inexplicably, which is to say they performed below the level expected of competent counsel. That means we will most likely see these issues return in the form of a § 2255 claim for ineffective assistance of counsel. The fact that a possibly meritorious § 2255 claim is waiting has no direct effect on what we do here now. Nonetheless, the majority's scenario, which depends on a holding that counsel's ineffectiveness possibly rose to a level of constitutional infirmity, suggests to me an alternative explanation: the district court simply was not clear, and it abused its discretion in excluding Mr. Nacchio's expert.