Defense Digest

Plaintiffs Ability To Audit Expert Witnesses: Discoverability Of An Expert's 1099 Income Tax Forms

In the case of J.S. v. Whetzel, 860 A.2d 1112 (Pa. Super. 2004), the Pennsylvania Superior Court expanded the limits of expert discovery by allowing counsel to obtain financial records from experts retained by the parties. In Whetzel, the court addressed the issue of whether an expert’s 1099 tax forms are discoverable for impeachment purposes. A federal tax form 1099 reports income for individuals who have been paid $600 or more in non-employee in service payments for a calendar year. The Superior Court held that a party may impeach an expert witness by introducing 1099 tax forms. The court ruled that 1099 tax forms are discoverable in cases with retaining counsel and any previous personal injury cases.

The Whetzel case involved a personal injury action that arose from an automobile accident in York County, Pennsylvania. During the course of litigation, the defense retained Perry A. Eagle, M.D., an orthopedic surgeon, as an expert witness. The plaintiffs served interrogatories on Dr. Eagle and requested certain financial information, including 1099 tax forms from 1999 to 2002 from any insurance company and/or any attorney. The plaintiffs sought the information to impeach Dr. Eagle on an alleged bias for defense counsel and defendants generally. After the plaintiffs filed a motion to compel Dr. Eagle's answers to interrogatories, the trial court directed Dr. Eagle to produce his 1099 tax forms from 1999 through 2002 from any insurance company and attorney. Dr. Eagle subsequently filed a motion for a protective order to shield his 1099 forms from discovery. The trial court denied Dr. Eagle's motion, which led to Dr. Eagle’s appeal to the Superior Court.

In the appeal, Dr. Eagle argued that the rules of procedure limit discovery of an expert witness to facts and opinions to which he will testify and the basis for those facts and opinions. Dr. Eagle further argued that the discovery request concerning the financial information is not reasonably calculated to lead to the discovery of admissible evidence. Dr. Eagle additionally claimed that these documents would reveal his medical treatment of patients not related to any litigation in which he may have participated.

The court ruled that rules of procedure limit discovery of an expert witness to information "acquired or developed in anticipation of litigation" and do not simply limit expert discovery to the facts and opinions upon which the expert is expected to testify. Impeachment of an expert witness by demonstrating partiality is permissible. The extent to which a party may cross-examine an expert witness on his financial records is limited and within the trial court's discretion. As a result, the court held that the 1099 tax forms related to Dr. Eagle's services for defense counsel, in this case and other cases, are discoverable because the information is relevant to address any potential bias. Additionally, the court ruled that the 1099 forms of the expert's services for insurance companies and attorneys generally are discoverable because the information is relevant to examine any potential bias against personal injury plaintiffs or defendants. The court further ruled that documentation unrelated to litigation is not discoverable.

The Whetzel ruling seems intrusive and burdensome. However, the court reasoned that this ruling has simply expanded the rules of expert discovery that previously existed. Previous court rulings have held that it is permissible to ask an expert witness about fees for testifying. Attorneys have been able to inquire about an expert's fees received in a particular area of litigation. The production of 1099 forms allows a party to substantiate the expert's earnings.

This case is significant because defense attorneys and insurance companies have a tendency to utilize the same experts in numerous cases because these experts are responsive, reliable, and effective in the courtroom. Based upon the Whetzel ruling, we must keep in mind that the opposing party may request 1099 tax forms from these experts in an attempt to establish bias. As a result, attempts should be made to expand the current expert database in an attempt to eliminate bias. It may even be necessary to cross jurisdictional boundaries in retaining experts. Furthermore, Whetzel can be a tool in defense discovery requests directed to opposing parties. However, this can be a double-edged sword because once the defense makes the request for the 1099s, a reciprocal request from the opposing counsel can be expected. It remains to be seen how often plaintiffs will request 1099 tax forms under Whetzel.

*Edward is an associate practicing in the King of Prussia, PA office. He can be reached at (610) 354-8268 or egalang@mdwcg.com.