Jinro America Inc v Secure Investments Inc
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School
Suffolk University**We aren't endorsed by this school
Course
LAW 102
Subject
Law
Date
Jan 7, 2025
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3
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1.Jinro America Inc v Secure Investments Inca.Jinro America, Inc. sued Secured Investments, Inc. et al. for breach of contract, fraud and racketeering arising from the failure of a business deal in the international trade for frozen chickens. The defendants claimed that the deal was a sham. b.At trial, over Jinro’s objections, defendants introduced a purported expert witness, David Herbert Pelham, on Korean business practices, particularly Koreans’ tendency to engage in fraudulent activity. Pelham had been the general manager of the Pinkerton Detective Agency’s office in Korea. Although he claimed to have familiarized himself with Korean business practices as part of his job duties and as “a hobby of his,” Pelham had no formal education or training in business or as a cultural expert. He was not a lawyer, rather Pelham was a private investigator living in Korea who had provided commercial security for various non-Korean companies doing business in Korea. Prior to his employment by Pinkerton, Pelham had been trained as an investigator with the United States Air Force Office of Special Investigations, and had commanded the office that investigated Korean companies doing business with the Air Force. Pelham’s other purported qualifications were that he had “served five tours of duty in Korea,” lived there for about 12 years and was married to a Korean woman.c.Although Pelham had not investigated Jinro or had any direct contact with Jinro, defendants offered his testimony ostensibly to educate the jury about the “modus operandi” of Korean businessesi.Pelham testified how Korean businessmen behaved in general and that oral contracts with Koreans would go badly for the parties to the contract. ii.Little of this testimony was directly connected to Jinro itself, and none was based on Pelham’s personal knowledge of Jinro or its affiliates. iii.Pelham based his conclusions on newspaper articles and unspecified information from his office staff. d.A jury found for the defendants, and the district court sua sponte entered judgment against Jinro. Jinro appealed.e.Issuei.Was the testimony admissible as an expert opinion?f.Analysisi.Pelham came before the jury cloaked with the mantle of an expert. This is significant for two reasons: 1.First, it allowed him to testify based on hearsay information, and to couch his observations as generalized “opinions” rather than as first-hand knowledge about Jinro and its activities in particular.a.pelham gave broad opinions about Korean businesses based on his own experiences as an investigator, his personal “hobby” in Korean business practices, input from his office
staff, and his marriage to a Korean woman. This wasn’t a solid basis for the expert opinion he gave the jury. He didn’t provide any research, studies, or solid evidence to support his sweeping statements about Korean businesses, relying instead on newspaper articles and anecdotal examples, many of which were based on hearsay.2.Second, as the opinion of a purported “expert” on Korean business practices and culture, his statements were likely to carry special weight with the jury.a.Pelham’s qualifications to offer such expert testimony were clearly lacking. His experience was limited to being a professional investigator who had come across corrupt business practices. He didn’t have the legal, business, or financial expertise needed to understand or evaluate the Jinro transaction. He had no formal education or training in cultural studies or Korean culture, and he wasn’t a sociologist or anthropologist—fields that would have given him the qualifications to offer reliable insight into the cultural traits and behaviors of a specific group of people.b.While people with experience in a certain field can sometimes give valuable information to help a jury, Pelham’s testimony wasn’t about his professional background as a commercial investigator explaining the structure of the Korean government or banking systems. Had he done that, it might have helped the jury understand Jinro’s interactions with those systems. Instead, Pelham used his investigator background to make broad cultural generalizations about Korean businesses.3.For these reasons, care must be taken to assure that a proffered witness truly qualifies as an expert [under] the requirements of Rule 702. .g.Conclusioni.The Ninth Circuit concluded that the trial court abused its discretion by allowing Pelham to testify as an expert. Because Pelham's qualifications were insufficient and his testimony lacked the reliability needed to assist the jury, the court held that his testimony should not have been admitted.ii.The case was remanded for further proceedings, excluding Pelham's testimony from consideration.iii.Rule 702 requires that expert testimony be based on specialized knowledge and reliable methods. The expert must have qualifications that are relevant and adequate to the issue at hand. (rule 602)
iv.Expert testimony must be more than just personal experience or generalizations; it must be supported by empirical evidence or substantial professional training.v.Courts must ensure that expert testimony is reliable, particularly when it is likely to have a significant impact on the outcome of the case. In this case, the generalizations about Korean business culture were insufficient to qualify Pelham as an expert, and his testimony did not meet the threshold for admissibility under Rule 702.vi.Practical experience alone does not automatically qualify someone as an expert. Expertise in a field requires a foundation of knowledge, not just anecdotal experience, particularly when dealing with complex issues like cultural practices or business ethics.2.