Scott v. AT&T Inc.

Background

This proposed class action concerns AT&T Inc., the AT&T Defined Benefit Plan, and AT&T Services, Inc. AT&T sought to exclude plaintiff’s expert Ian Altman’s opinions under Federal Rule of Evidence 702 in connection with class-certification and summary-judgment proceedings. The court held an evidentiary proceeding at which Altman and AT&T’s rebuttal expert, Jack Abraham, discussed Altman’s methods and analysis.

The court directed the experts to confer about AT&T’s data sets and disputes over whether the data was complete. After that process, Altman updated his data set and filed a second supplemental report, and Abraham filed a supplemental rebuttal report.

The court also directed AT&T to support its assertion that Altman’s methodology was seriously flawed by identifying the people who would be beneficiaries under his approach. The court found that AT&T went beyond that instruction by filing unauthorized arguments and materials, including arguments about whether the proposed class members satisfied the commonality requirement. The court struck Exhibits C and E through X to AT&T’s statement, along with related arguments and statements in AT&T’s statement and Abraham’s January 31, 2025 declaration. It disregarded those materials when deciding the request to exclude Altman’s opinions.

Legal standard

Rule 702 permits a qualified expert to give opinion testimony when the party offering the testimony shows that it is more likely than not that the testimony is based on sufficient facts or data, uses reliable principles and methods, and reliably applies those principles and methods to the facts. The court applied Rule 702 and the standards associated with Daubert v. Merrell Dow Pharmaceuticals, Inc. The court emphasized that reliability is evaluated flexibly and that criticisms affecting the weight of expert testimony generally can be addressed through cross-examination rather than exclusion.

The court’s analysis

AT&T argued that Altman’s opinions about the Plan’s conversion factors were unreliable because his preferred method did not establish the bottom of the range of actuarially equivalent results and because his description of the method as conservative was unsupported. The court rejected those arguments. It stated that Altman relied on his experience and evidence about industry practice in concluding that the Plan’s conversion factors did not produce actuarially equivalent joint-and-survivor-annuity benefits because the underlying assumptions were outdated and unreasonable. The court said AT&T could raise its concerns during cross-examination, but the objections did not show that the opinions were so unreliable as to qualify as junk science.

AT&T also identified alleged errors in Altman’s methodology for calculating amounts referred to in the opinion as “damages.” The court noted that damages are not available under the Employee Retirement Income Security Act, but that a payment of money is not necessarily a barred remedy and that the statute permits participants to sue to recover benefits due under their plan. The court focused on whether Altman’s methods were reliable for purposes of expert admissibility.

The court accepted Altman’s use of disclosed judgment-based adjustments and assumptions when he believed the available data was deficient. It found that he adequately explained and disclosed those adjustments and that AT&T had not shown that the assumptions were so extreme that no reasonable actuary would make them. The court treated AT&T’s objections to Altman’s handling of the data as challenges to the weight of his opinions, not their admissibility.

For records that did not identify a spouse’s age, Altman assumed that a female spousal beneficiary was about three years younger than the Plan participant. He said this was based on common actuarial practice and historical patterns, and the plaintiffs presented evidence that AT&T’s own actuaries had used the same assumption. The court said it could consider AT&T’s argument about whether that assumption was appropriate in the individual-benefits context if trial testimony made the issue relevant.

Altman also assumed that a listed beneficiary was the participant’s spouse when the records lacked information or contained an unexplained “NP” notation. He excluded known non-spouses and relied on records showing that the beneficiary was a spouse in most of more than 30,000 records. The court found that this assumption was based on sufficient facts or data and concluded that objections to it went to the opinion’s weight rather than admissibility.

When AT&T’s records did not identify the joint-and-survivor-annuity conversion factor, Altman calculated an implied factor by dividing the participant’s joint-and-survivor-annuity benefit by the accrued benefit payable at normal retirement age. AT&T did not challenge that method categorically or as mathematically incorrect for calculating unlisted factors. Instead, AT&T argued that some benefit amounts also reflected an early-retirement reduction or a pop-up benefit.

The court rejected those objections as grounds for exclusion. It found that Altman had performed calculations that both included and did not include the pop-up benefit, and that his view that the benefit should not be included was based on his experience and interpretation of the benefit. As to early-retirement reductions, Altman explained why he believed the records already reflected those reductions in both the benefit amount and the accrued-benefit amount. The court said possible inconsistencies in AT&T’s records could be explored through cross-examination.

The experts later agreed that the implied-factor calculation did not include the early-retirement benefit and was therefore incorrect for some participants. The court nonetheless concluded that earlier erroneous calculations for a small number of participants out of nearly 40,000 relevant participants did not justify excluding Altman’s opinions.

Finally, AT&T objected to Altman’s inclusion of participants who received both a partial lump sum and a joint-and-survivor-annuity benefit. The court viewed that dispute as concerning the merits of the plaintiffs’ claims for those proposed class members—specifically, whether the resulting benefits were qualified or subject to the statutory actuarial-equivalency requirement—not the reliability of Altman’s methodology. The court noted that participants later found to be uninjured could be removed from the calculations.

Disposition

The court denied AT&T’s request to exclude Altman’s opinions under Rule 702 and related cases. The denial was without prejudice to renewing the request at trial as to specific calculations, depending on the evidence and circumstances. The court stated that Altman’s opinions would be tested through cross-examination at trial.