KT4 Partners LLC v. Palantir Techs. Inc.
Facts
Plaintiffs, stockholders of Palantir, alleged that Palantir and DTA interfered with Plaintiffs' prospective sale of stock to CDH and conspired to divert that opportunity to themselves. Palantir designated Zachary Abrams, an experienced portfolio manager in private secondary transactions, to opine that the proposed transaction with CDH lacked a reasonable certainty or expectation of closing based on factors such as pace, size, competing financing activity, and the attractiveness of a primary investment. Palantir also designated Dr. Yael Hochberg, a finance professor and researcher, to testify about primary and secondary private-company transactions, the incentives surrounding them, and why the CDH transaction was unlikely to close regardless of any interference. Plaintiffs argued both experts relied on selective evidence, used unreliable or improper methods, and employed an incorrect legal standard.
Issue
Whether the court should exclude the testimony of Abrams and Hochberg under Delaware Rule of Evidence 702 and Daubert because their opinions were allegedly selective, unreliable, or based on an incorrect legal standard. The court also considered whether testimony about market custom and practice improperly stated a legal standard.
Rule
Under Delaware Rule of Evidence 702, expert testimony is admissible if specialized knowledge will assist the trier of fact, the witness is qualified, the testimony is based on sufficient facts or data, the testimony is the product of reliable principles and methods, and the witness has reliably applied those principles and methods to the facts. Delaware courts, applying Daubert, consider whether: (i) the witness is qualified by knowledge, skill, experience, training, or education; (ii) the evidence is relevant and reliable; (iii) the opinion is based on information reasonably relied on by experts in the field; (iv) the testimony will assist the trier of fact; and (v) the testimony will not create unfair prejudice or confuse or mislead the jury. Challenges that primarily attack factual assumptions, alleged bias, or the weight to be given an expert's conclusions generally go to credibility and weight rather than admissibility, and peer review is not invariably required for non-scientific experiential expert testimony.
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