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Jinro Am., Inc. v. Secure Invs., Inc. - 266 F.3d 993 (9th Cir. 2001)

Rule:

Otherwise admissible expert testimony may be excluded under Fed. R. Evid. 403 if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or undue delay.

Facts:

Plaintiffs, JR International Corp. (JRI), a South Korean corporation, and its wholly owned subsidiary, Jinro America, Inc. (JAI), alleged that defendants Brian Bishop, COBBI International Food Products (COBBI), Landmark Forwarding Company (Landmark), Burnett Watkins and Secure Investments, Inc. (Secure), breached a contract for the buying and selling of frozen chicken. When the parties' deal unraveled, Jinro sued the defendants to recover millions of dollars for breach of contract, fraud and racketeering, but were met with the defendants' claim that the chicken deal was designed to cover up a high-risk investment program that circumvented Korea's currency regulations. During the portion of the bifurcated trial involving whether the contract was a sham, defendants' expert testified that Korean companies had a propensity to engage in fraudulent activity.  The district court granted summary judgment to defendants. Jinro appealed.

Issue:

May an expert testimony be excluded under Fed. R. Evid. 403?

Answer:

Yes

Conclusion:

The Court of Appeals for the Ninth Circuit reversed the district court's grant of summary judgment to defendants. Defendant's expert, a private investigator, should not have been allowed to testify as he did because his testimony was unreliable under Fed. R. Evid. 702 and was unduly prejudicial under Fed. R. Evid. 403. The court also determined that (1) bifurcation was proper, (2) the parole evidence rule allowed the admission of evidence to prove that the written agreement was actually a cover-up for fraudulent or illegal activity, and (3) the district court acted appropriately in fashioning the foreign law jury instructions.

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