HomeMy WebLinkAboutTracFone's Reply in Support of Motion Preclude G. Ashpaugh Testimony1
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125110.0001/8363378.1
TRACFONE’S REPLY IN SUPPORT OF ITS
MOTION TO PRECLUDE TESTIMONY - 1 LANE POWELL PC
1420 FIFTH AVENUE, SUITE 4200
P.O. BOX 91302
SEATTLE, WA 98111-9402
206.223.7000 FAX: 206.223.7107
BEFORE THE HEARING EXAMINER OF THE CITY OF RENTON
RE: TracFone Wireless, Inc. Administrative Appeal
RESPONDENT TRACFONE’S REPLY BRIEF IN SUPPORT OF ITS MOTION TO PRECLUDE TESTIMONY FROM WITNESS GARTH ASHPAUGH
TRACFONE’S REPLY
In its Motion to Preclude Testimony, Appellant TracFone argues that Respondent, the
City of Renton (“City”), should be precluded from using Garth Ashpaugh as an expert witness.
As explained in the Motion, (1) legal opinions are not a proper subject of expert testimony; (2)
Ashpaugh has no relevant expertise; and (3) Ashpaugh’s inexpert legal opinions are not part
of the record, because he was not retained by the City until after TracFone commenced this
appeal, meaning that the City did not rely on his opinions or purported expertise in issuing the
assessment. TracFone’s Motion to Preclude Testimony (“Mot.”) at 1-2, 5-8.
Since TracFone filed its Motion to Preclude in late January 2021, the City has submitted
two declarations from Ashpaugh relating to the parties’ pending summary judgment motions.
See Declarations of Garth T. Ashpaugh dated January 29, 2021 (“First Ashpaugh Decl.”) and
February 12, 2021 (“Second Ashpaugh Decl.”).1 Ashpaugh’s two declarations provide further
1 The First Ashpaugh Declaration was filed the same day as TracFone’s Motion (January 29, 2021).
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125110.0001/8363378.1
TRACFONE’S REPLY IN SUPPORT OF ITS
MOTION TO PRECLUDE TESTIMONY - 2 LANE POWELL PC
1420 FIFTH AVENUE, SUITE 4200
P.O. BOX 91302
SEATTLE, WA 98111-9402
206.223.7000 FAX: 206.223.7107
support for TracFone’s Motion, because they exemplify the problems with the City’s reliance
on his testimony. Both are comprised largely of superficial legal analysis and conclusions—
even though Ashpaugh is not a lawyer, and admittedly has no expertise in Washington tax law.
Indeed, even if Ashpaugh did have relevant expertise, legal opinions are not the proper subject
of expert testimony, because the purpose of such testimony is to assist in determining facts at
issue—not to argue the law. The City should therefore be barred from introducing Ashpaugh’s
reckonings about Washington law and the significance of contract terms.
While the City argues that Ashpaugh’s testimony is appropriate under the more relaxed
evidentiary rules governing administrative hearings, this is wrong. As explained in TracFone’s
Motion and below, Ashpaugh’s legal conclusions are uninformed and misleading, and should
be excluded under any evidentiary standard. They are also irrelevant, since both parties have
had ample opportunity to make legal arguments in their briefing, and the Hearing Examiner is
competent to resolve legal questions based on these arguments and the audit record.2 Finally,
Ashpaugh’s opinions about TracFone’s “business model” have no foundation, because he has
no direct knowledge of TracFone’s operations, and his conclusions are based on assumptions
and assumptions, along with inexpert analysis of TracFone contracts. The Hearing Examiner
should therefore exercise its discretion to preclude Ashpaugh’s testimony.
ARGUMENT
A. Ashpaugh’s legal opinions should be excluded.
As noted above, the City has now submitted two declarations from Garth Ashpaugh in
connection with the parties’ pending summary judgment motions. Each is largely comprised
2 As explained in TracFone’s Motion, the City’s audit of TracFone took over four years to complete, and
yet the City apparently never consulted with any expert—including Garth Ashpaugh—in attempting to understand
TracFone’s “business model” or in determining whether TracFone is properly within the scope of the Washington
utility tax statute or Renton utility tax ordinance. Mot. at 7. Thus, Ashpaugh’s opinions are not part of the audit
record in this case, and should not be considered on appeal. Mot. at 7-8.
The City does not address this argument directly in its Opposition, but claims “[it] has reasonably relied
on Mr. Ashpaugh’s analysis and expertise.” Opp. at 3. This is misleading. The City did not consult Ashpaugh
until after TracFone had initiated this action—meaning it did not rely on his analysis or opinions during the audit
or in issuing the assessment. Only now is the City relying on Ashpaugh’s inexpert legal conclusions.
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125110.0001/8363378.1
TRACFONE’S REPLY IN SUPPORT OF ITS
MOTION TO PRECLUDE TESTIMONY - 3 LANE POWELL PC
1420 FIFTH AVENUE, SUITE 4200
P.O. BOX 91302
SEATTLE, WA 98111-9402
206.223.7000 FAX: 206.223.7107
of legal analysis and conclusions. In the first, Ashpaugh attempts to construe various TracFone
contracts (First Ashpaugh Decl., ¶¶ 4-12), and concludes “[t]he relationship between TracFone
and the retailer is more akin to an agent relationship” (id. at ¶ 12).3 Ashpaugh then makes the
legal assertion that “TracFone is a telephone business ‘providing access to network telephone
service’ for purposes of the Renton Municipal Code and the Revised Code of Washington” (id.
at ¶ 14). This opinion is based on Ashpaugh’s personal reading of code provisions, “an FCC
document,” and a Washington Senate Bill Report (id. at ¶¶ 14-17). In his second declaration,
Ashpaugh claims—based again on his reading of the contracts—that “the relationship between
TracFone and the retailer is not wholesale” (Second Ashpaugh Decl., ¶ 4).
As explained in TracFone’s Motion and below, Ashpaugh has no expertise that would
qualify him to opine on these legal questions—and in any event, legal opinions in an expert
declaration are, for good reasons, inadmissible. The “underlying purpose of expert testimony”
is “‘to assist the finder of fact in understanding the evidence and determining a fact in issue.’”
State v. Bell, 57 Wash.App. 447, 452 (1990) (quoting State v. Ward, 55 Wash.App. 382, 384
(1989)) (emphasis added). Legal opinions are not evidence, and the facts at issue are distinct
from legal questions, which are to be argued by counsel and resolved by the Hearing Examiner.
While the City notes that the Washington Rules of Evidence do not apply here, these principles
have a strong policy foundation, and the City has given no compelling reason to abandon the
principle that prohibits an unqualified “expert” from weighing in on legal disputes.
1. Ashpaugh has no expertise in Washington utility tax law.
As explained in TracFone’s Motion, Ashpaugh has already admitted that he is not a
lawyer; has never performed any work in Washington involving state or local utility tax on a
wireless carrier; and does not consider himself an expert on Washington utility tax. Mot. at 5.
The City nonetheless claims that Ashpaugh is qualified to interpret and apply provisions of the
3 As explained below, one basis for this opinion is that TracFone’s contract with Rent-A-Center refers to
“a quarterly partnership/strategic planning session.” Ashpaugh evidently believes this description of the quarterly
planning session implied or created an agency relationship.
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125110.0001/8363378.1
TRACFONE’S REPLY IN SUPPORT OF ITS
MOTION TO PRECLUDE TESTIMONY - 4 LANE POWELL PC
1420 FIFTH AVENUE, SUITE 4200
P.O. BOX 91302
SEATTLE, WA 98111-9402
206.223.7000 FAX: 206.223.7107
Revised Code of Washington, and construe TracFone contracts, because “[his] experience with
the telecommunications industry spans decades,” and “[he] has been engaged in utility matters
and regulation full-time for over twenty years.” Opp. at 1–2.4
This general industry experience obviously does not qualify Ashpaugh to opine on the
interpretation and application of Washington utility tax law. Ashpaugh’s legal inexperience is
illustrated by, for example, his conclusion that “[t]he relationship between TracFone and the
retailer is more akin to an agent relationships,” based partly on the fact that one retailer contract
includes the word “partnership” (First Ashpaugh Decl. at ¶ 12). But the provision in question
merely stipulates that “TracFone will provide [Rent-A-Center] with … a full analysis quarterly
during a quarterly partnership/strategic planning session between both companies” (id., Ex. 3,
TF_000757) (emph. added). This descriptive language does not, of course, establish that Rent-
A-Center is TracFone’s “partner” or “agent” in any legal sense.5 In fact, just eight pages later
in the same contract, there is a clause underlining that “[n]othing contained in this Agreement
will be deemed to create any agency, joint venture, partnership or similar relationship between
the parties [i.e., TracFone and Rent-A-Center]” (id., Ex. 3, TF_000765).
How could the City’s “expert” make such a basic error? It’s simple: he is not a lawyer,
has no relevant legal expertise, and has no business construing contracts and statutes.
The Washington courts “[do] not hesitate to exclude testimony by a purported expert
whose opinion is beyond the witness’s expertise, or whose opinion is too speculative to be
helpful to the trier of fact.” 5B Wash. Prac., Evidence Law and Practice § 702.5 (6th ed.). In
this case, Ashpaugh is plainly unqualified to interpret contracts or Washington utility tax law,
and the City should therefore be precluded from relying on his inexpert legal opinions.
4 The City also says Ashpaugh has conducted “audits of other prepaid wireless companies like TracFone
…, namely Cricket and NexTel (d/b/a Boost) for Lincoln, Nebraska.” Opp. at 2. It is unclear how this qualifies
him to interpret and apply Washington utility tax law to a different company (TracFone).
5 An actual partnership requires a common venture, the sharing of profits and losses, and a joint right of
control. See, e.g., Samra v. Singh, --- P.3d ----, 2020 WL 8226070 at *4 (Wash.App., Nov. 2, 2020) (citing RCW
25.05.005(6)). The passing use of “partnership/strategic” to describe a quarterly meeting is irrelevant.
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125110.0001/8363378.1
TRACFONE’S REPLY IN SUPPORT OF ITS
MOTION TO PRECLUDE TESTIMONY - 5 LANE POWELL PC
1420 FIFTH AVENUE, SUITE 4200
P.O. BOX 91302
SEATTLE, WA 98111-9402
206.223.7000 FAX: 206.223.7107
2. Ashpaugh’s legal conclusions are unreliable and irrelevant.
In its Opposition, the City claims that TracFone’s Motion to Preclude is based on “the
more stringent Federal Rules of Evidence,” not the “relaxed” rules that govern administrative
hearings. Opp. at 2–3. This is incorrect and misleading. TracFone’s Motion properly cites
federal case law as persuasive authority,6 but the prohibition on legal conclusions in expert
testimony is also supported by a mountain of Washington case law. Moreover, while it is true
that evidentiary rules are relaxed in administrative hearings, the presiding officer is still entitled
to exclude unreliable and irrelevant evidence—which includes Ashpaugh’s testimony—and is
pointed towards the Washington Rules of Evidence for guidance. RCWA 34.05.452(2).
The Washington Supreme Court has held that a declaration is to be disregarded to the
extent it contains legal conclusions. Orion Corp. v. State, 103 Wash.2d 441, 461–62 (1985);
see also Keates v. City of Vancouver, 73 Wash.App. 257, 265, review denied, 124 Wash.2d
1026 (1994). Thus, “the [Washington] courts will normally refuse to allow the expert to
express an opinion on whether a party violated [a] statute, ordinance, or regulation.” 5B Wash.
Prac., Evidence Law and Practice §§ 704.5–7 (6th ed.). In particular, “opinions on the ultimate
legal issue before the court are not properly considered under the guise of expert testimony.”
Washington State Physicians Ins. Exchange & Ass’n v. Fisons Corp., 122 Wash.2d 299, 344
(1993) (emphasis in original); see also State v. Olmedo, 112 Wash.App. 525, 532–33 (2002)
(experts cannot opine on the application of law to the particular case); Chester v. Deep Roots
Alderwood, LLC, 193 Wash.App. 147 (2016) (trial court properly excluded expert opinion
interpreting statutory term “sterile instruments,” and applying it to case at bar). This includes
analysis of contract terms, since “[t]he interpretation of an unambiguous contract is a question
of law.” Stranberg v. Lasz, 115 Wash.App. 396, 402 (2003) (citing Mayer v. Pierce County
Med. Bureau, Inc., 80 Wash.App. 416, 420 (1995)).
6 “Washington courts treat as persuasive authority federal decisions interpreting the federal counterparts
of our own court rules.” Farrow v. Alfa Laval, Inc., 179 Wash.App. 625, 622 (2014) (quoting Young v. Key
Pharm., Inc., 112 Wash.2d 216, 226 (1989)).
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125110.0001/8363378.1
TRACFONE’S REPLY IN SUPPORT OF ITS
MOTION TO PRECLUDE TESTIMONY - 6 LANE POWELL PC
1420 FIFTH AVENUE, SUITE 4200
P.O. BOX 91302
SEATTLE, WA 98111-9402
206.223.7000 FAX: 206.223.7107
Notwithstanding this well-established rule, the City proposes that Ashpaugh should be
allowed to opine on legal questions under RCWA 34.05.452(1), which states that “[e]vidence
… is admissible [in an administrative hearing] if in the judgment of the presiding officer it is
the kind of evidence on which reasonably prudent persons are accustomed to rely in the
conduct of their affairs.” This same provision also clarifies that “[t]he presiding officer may
exclude evidence that is irrelevant [or] immaterial,” id., and indicates that “the presiding officer
shall refer to the Washington Rules of Evidence as guidelines for evidentiary rulings,” where
not inconsistent with subsection (1). RCWA 34.05.452(2).
No “reasonably prudent” person would rely on Ashpaugh’s analysis and application of
Washington tax law, or his reading of TracFone contracts. As explained in TracFone’s Motion,
Ashpaugh admits he is not a lawyer, and has no expertise in Washington utility tax law. Mot.
at 5. In addition, as explained above, Ashpaugh has already demonstrated his own lack of legal
sophistication, when he suggested that an agency relationship between TracFone and retailers
was implied or created by a reference to a “quarterly partnership/strategic planning session” in
a contract that explicitly disclaimed any such relationship several pages later.
Ashpaugh’s testimony is also irrelevant. One reason that legal opinions are prohibited
in expert testimony is because the courts—or, in this case, the Hearing Examiner—are charged
with answering such questions, and are perfectly competent to do so. See Chester, 193 Wash.
App. at 159. Litigants may introduce legal arguments through counsel, but courts and tribunals
do not need expert testimony to apply statutes or construe unambiguous contract terms—even
when the expert is actually qualified, which Ashpaugh is not.7 As noted above, the purpose of
expert testimony is “to assist the finder of fact in understanding the evidence and determining
a fact in issue.” Bell, 57 Wash.App. at 452. Ashpaugh’s analysis of statutes and contracts does
nothing to help resolve any open factual question, and should be excluded.
7 In Sung v. Mission Valley Renewable Energy, LLC, 2012 WL 1298285 (E.D.Wa. Dec. 5, 2012), cited in
TracFone’s Motion, the court excluded expert testimony from a law professor regarding the materiality of alleged
misstatements and omissions, on the ground that her learned opinion would be inadmissible and unhelpful.
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125110.0001/8363378.1
TRACFONE’S REPLY IN SUPPORT OF ITS
MOTION TO PRECLUDE TESTIMONY - 7 LANE POWELL PC
1420 FIFTH AVENUE, SUITE 4200
P.O. BOX 91302
SEATTLE, WA 98111-9402
206.223.7000 FAX: 206.223.7107
B. There is no foundation for Ashpaugh to opine on TracFone’s “business model.”
The vast majority of Ashpaugh’s first declaration is devoted to the improper analysis
of TracFone contracts. However, Ashpaugh also supports his purported expert knowledge and
opinions about TracFone’s “business model” by saying that he has conducted “audits of other
prepaid companies like TracFone …, namely Cricket and NextTel (d/b/a Boost) for Lincoln,
Nebraska” (First Ashpaugh Decl., ¶ 3 (emphasis added)). On this basis, Ashpaugh claims that
he is “familiar with the business model of prepaid wireless companies”—including TracFone
in particular. Id. Along with his inexpert reading of TracFone contracts, this experience seems
to provide the basis of Ashpaugh’s legal conclusion that “TracFone, not the retailers, provides
access to wireless service” under Washington law (id. at ¶ 12).
This is not an adequate foundation for Ashpaugh to opine on the “business model” of
TracFone.8 Ashpaugh has never audited TracFone in any jurisdiction, nor has he interviewed
any TracFone employees. Although he seems to assume that TracFone must operate like other
companies he has audited, this appears to be pure speculation. His declarations give no factual
basis to conclude that TracFone is materially similar to Cricket or NexTel, except that they are
all “prepaid companies” (see, e.g., First Ashpaugh Decl. at ¶ 3). Where an expert’s conclusions
are grounded in assumption and speculation, they lack foundation, and must be excluded. See,
e.g., Rothweiler v. Clark Cnty., 108 Wash.App. 91, 100–101 (2001); Simmons v. City of
Othello, 199 Wash.App. 384, 393 (2017); Miller v. Likins, 109 Wash.App. 140, 148–50 (2001);
see also Tilton v. McGraw-Hill Companies, Inc., 2007 WL 3229158 (W.D. Wash. Oct. 30,
2007) (plaintiff’s experience working at one company did not provide adequate foundation for
him to testify about the employment practices of other companies).
8 In a summary judgment proceeding, if an expert witness’s opinion is offered in the form of an affidavit
or declaration, the factual basis for that opinion must also be explained in the same document. Anderson Hay &
Grain Co., Inc. v. United Dominion Industries, Inc., 119 Wash.App. 249 (Div. 3 2003); see also Lilly v. Lynch,
88 Wash.App. 306 (Div. 2 1997) (expert affidavit stricken because expert’s qualifications were not described).
ER 705—which permits an expert to opine without first explaining the basis for her opinion—does not apply at
summary judgment. Hash v. Children’s Orthopedic Hosp. & Med. Ctr., 49 Wash.App. 130, 133 (1987).
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125110.0001/8363378.1
TRACFONE’S REPLY IN SUPPORT OF ITS
MOTION TO PRECLUDE TESTIMONY - 8 LANE POWELL PC
1420 FIFTH AVENUE, SUITE 4200
P.O. BOX 91302
SEATTLE, WA 98111-9402
206.223.7000 FAX: 206.223.7107
CONCLUSION
Garth Ashpaugh is manifestly unqualified to interpret and apply Washington utility tax
law or construe TracFone contracts, and questions of law are properly reserved for the Hearing
Examiner. In addition, there is no foundation for Ashpaugh to opine on TracFone’s “business
model.” The City should therefore be barred from using Ashpaugh’s inexpert, after-the-fact
legal analysis to supplement the factual record from the audit. TracFone respectfully requests
that the Hearing Examiner enter an order that precludes the City from relying on Ashpaugh’s
declarations or calling him to testify in this proceeding.
DATED: February 19, 2021
LANE POWELL PC
By Scott M. Edwards, WSBA No. 26455 edwardss@lanepowell.com Grant S. Degginger, WSBA No. 15261 deggingerg@lanepowell.com Attorneys for TracFone Wireless, Inc.
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125110.0001/8363378.1
TRACFONE’S REPLY IN SUPPORT OF ITS
MOTION TO PRECLUDE TESTIMONY - 9 LANE POWELL PC
1420 FIFTH AVENUE, SUITE 4200
P.O. BOX 91302
SEATTLE, WA 98111-9402
206.223.7000 FAX: 206.223.7107
CERTIFICATE OF SERVICE
I hereby certify under penalty of perjury of the laws of the State of Washington and the
United States that, on the date listed below, I caused to be served a copy of the attached
document to the following persons via electronic mail:
Kari L. Sand Ogden Murphy Wallace P.L.L.C. 901 Fifth Avenue, Suite 3500 Seattle, WA 98164 ksand@omwlaw.com Cynthia Moya Renton City Clerk 1055 So. Grady Way Renton, WA 98057 cmoya@rentonwa.gov olbrechtslaw@gmail.com
Executed on the 19th day of February, 2021, at Seattle, Washington.
s/ Barbara LaBelle Barbara LaBelle, Legal Assistant