Kleiman v Wright: Which experts will be allowed at trial?

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The court in Kleiman v Wright has ruled on a series of pre-trial motions as to whether or not certain expert witnesses from both sides will be allowed in next year’s jury trial.

Both Ira Kleiman and Dr. Craig Wright had filed motions seeking to get the expert testimony being offered by the other side thrown out. Kleiman was seeking the exclusion of four expert testimonies; Wright was seeking the exclusion of five.

On November 16, the Court handed down their ruling, and the results are somewhat of a mixed bag, but it appears that the Court is erring on the side of allowing the testimony to be presented and assessed at trial. It is important to note that the Court is being asked to decide whether or not to exclude these testimonies: a decision not to exclude the testimony does not mean that the evidence has been accepted, only that it will be put to the jury at trial.

Ira Kleiman’s motion to have Craig Wright’s experts stricken

Ira’s motion covers wide evidential ground, asking for the exclusion of testimony from four witnesses on the grounds that they either failed to comply with the bare minimum requirements set out in the U.S. civil procedure rules or issued opinions which were irrelevant to the issues in the lawsuit.

Expert 1: Dr. Ami Klin (Allowed)

Dr. Klin is a licensed clinical psychologist who was asked by Dr. Wright to testify as to whether Wright met the criteria for Autism Spectrum Disorder and how this would affect Wright’s presentation in legal proceedings such as depositions or hearings. Klin had presented a report which illustrates that Dr. Wright has Autism Spectrum Disorder which renders him profoundly deficient in ‘reciprocal social behavior.’ Wright had argued that this evidence is critical in ensuring that the jury can properly contextualize Wright’s behavior and judge him by the facts rather than on his disability.

The Court rejected this attempt by Kleiman, finding Dr. Klin both credible and reliable.

Expert 2: Kevin Madura (Allowed)

Kevin Madura was retained by Dr. Wright to provide an opinion on whether Dave Kleiman had the requisite skills and experience necessary to have written the original Bitcoin core application that was released in 2009, as is contended by Ira. Madura had also been acting as a consultant to Dr. Wright’s defense team.

Kleiman argued that this testimony should be stricken because Madura failed to disclose the material he had reviewed in connection with his work as a consultant for Dr. Wright, as he is required to do as a witness. The Court rejected this argument, saying that there is no ambiguity between Madura’s two roles and so was not required to make such a disclosure regarding his consultancy work.

Kleiman also argued that Madura’s opinion is speculative and unreliable, accusing him of inappropriately cherry-picking the evidence he is relying on to form his opinions and that generally, there is too scant evidence to draw any conclusions about Dave Kleiman’s programming ability. The Court also reject this line of argument, finding that Ira had failed to show that the materials being relied on by Madura are unreliable and that this is largely a question to be left to trial.

Expert 3: F. Harley Norwitch (Disallowed)

Norwitch is a forensic document examiner who was retained by Wright as an expert to evaluate the signatures on certain documents. Norwitch was set to testify that various documents submitted in this case which include alleged loan agreements between Wright and the elusive Ms Nguyen—who at one point listed herself as the registered agent for W&K—contain forgeries of Wright’s signature.

Ira wanted this stricken on the basis that the expert report doesn’t contain the basis and reasons for every opinion offered and the testimony fails to meet the bare minimum requirements explored in Daubert—in other words, there is no meaningful explanation as to how or why he reached the opinions.

The Court agreed with Kleiman’s submission, saying that Norwitch’s reports “are largely conclusory and fail to adequately set forth the bases and reasons for his opinions other than through unhelpful platitudes.” Norwitch’s expert opinion has therefore been stricken.

Expert 4: Dr Stewart MacIntyre (Mostly allowed)

Dr MacIntyre specializes in infectious diseases and was retained by Wright to form an opinion as to Kleiman’s medical conditions, and who ultimately concluded that:

1. Kleiman had two chronic infections (soft tissue and bone) and
2. Kleiman while hospitalized received medication which could affect his mental status and ability to do complex work
3. Kleiman was given an irregular discharge from the hospital which could have adversely affected his health
4. autopsy revealed the presence of cocaine in his urine
5. that after his discharge, his lack of care by family friends and medical personal caused an uncontrolled infection to lead to his death

Kleiman argued for MacIntyre’s testimony to be stricken on the basis that his opinion on Dave Kleiman’s health and capacity to work is irrelevant, and that nothing in Kleiman’s health is at issue in the case.

The Court mostly found in favor of Dr. Wright. The Court said that Kleiman’s health information is relevant to whether or not he would have been able to carry out complex work—such as developing intellectual property and mining Bitcoin. The lone exception was the testimony regarding the lack of care by family and friends preceding Dave Kleiman’s passing: this the Court found would be likely unfairly prejudicial to the plaintiff’s case.

Craig Wright’s motion to have Ira Kleiman’s experts stricken

Wright, on the other hand, sought to exclude the opinion evidence of Kleiman’s experts on the basis that they were inadmissible on the basis that their opinions are the result of methods not generally accepted in their fields and that they were improperly seeking to influence the jury with ‘unsupported conclusions’ and ‘flawed methodologies.’

Expert 1: Gordon Klein (Disallowed)

A faculty member at UCLA’s Anderson School of Management who was retained by Kleiman to give opinion on whether the course of conduct and communications between Dave and Wright (and others) is consistent with a partnership and/or joint venture formed by the two. Being for Ira Kleiman’s side, this opinion was that the communications were consistent with the partnership/joint venture.

Wright argued that this evidence should be disallowed for three reasons: it reached improper legal conclusions; the testimony is unhelpful to the jury and usurps the jury’s role as finders of fact; and that the report contains improper opinions on the states of mind, motives and intent of Wright and others, essentially acting as an improper vehicle for a factual narrative.

The Court agreed with Wright, finding that the testimony “impermissibly invades both the province of the Court and the jury regarding determinations as to whether the defendant and Mr Kleiman entered into a partnership under Florida law.”

Expert 2: Dr Matthew Edman (Allowed)

A forensic cybersecurity engineer, Dr. Edman was brought in by Kleiman to analyze documents and correspondence—including the documents relating to Wright’s alleged partnership with Dave Kleiman—and testify whether they are authentic or have been manipulated. The expert was to testify that certain documents produced by Wright are forgeries/manipulated in a manner which would implicate Wright.

Wright wants these thrown out on the basis that Edman lacks the requisite expertise to opine on this and that his opinions are not based on reliable methodology, and his testimony will serve only to confuse the jury.

The Court ultimately agreed with Ira Kleiman, choosing to allow Edman’s testimony. The Court said that the plaintiffs have produced a sufficient basis for them to conclude that Edman is qualified to provide the testimony regarding the authenticity of the documents. Any question as to whether Dr. Edman lacks certain certifications can be explored on cross-examination and that any shortcomings as to the testimony will be questions of weight rather than admissibility. 

Expert 3: Andreas Antonopoulos (Part allowed, part disallowed)

Andreas Antonopoulos was produced by Ira as the author of “the world’s most cited book on Bitcoin.” He was retained to provide a description of Bitcoin, the concept of a fork, review all the communications attributed to Satoshi Nakamoto and analyze the data produced by the defendant as to his Bitcoin addresses.

Wright asked for this to be thrown out on the basis that:

• Antonopoulos is not qualified to opine on damages i.e. the price of Bitcoin, which is volatile and whose price varies on different markets. The Court did not agree that Antonopoulos is unqualified to testify on the spot market price of Bitcoin.
• Antonopoulos has a ‘deeply rooted bias’ against Wright, saying that he had made “chronic, derogatory and defamatory statements about Dr. Wright in public forums.” The Court rejected this, saying that Wright hasn’t shown that Antonopoulos is a partisan disguised as an expert and in any case, claims of bias are questions of weight, not admissibility, and can be attacked at trial.
• The process of examining Satoshi communications is unhelpful to the jury because Antonopoulos has conceded that he doesn’t know who or how many people Satoshi is/are. Court agrees with Ira—they are clearly relevant, though remark that any testimony about Satoshi’s communications must be connected with an actual opinion rather than a plain regurgitation of the communications.

While the Court largely disagreed with Wright’s objections, they did rule that one submission by Antonopoulos is inadmissible as hearsay: this is the May 4, 2019 message calling Wright a fraud which was included in a BCH transaction supposedly relating to a wallet address which appeared on an old loan agreement which indicated were being held in a trust in the U.K.

Expert 4: Stefan Boedeker (Mostly Allowed)

Stefan Boedeker is a statistician and economist who was retained by the plaintiffs to review transaction data that Wright provided—specifically a list of 16,404 Bitcoin blocks allegedly mined. Boedeker had opined that he observed patterns in this list which would have had an infinitesimally small chance of occurring naturally without data manipulation after the fact, suggesting that the list was forged.

The Court rejected Wright’s contention that Boedeker is unqualified to provide testimony on this subject, not being an expert in hashing or even Bitcoin mining generally. The Court felt that any questions as to the specifics of Boedeker’s testimony are best left to be explored on cross examination at trial.

However, the Court does exclude a supplemental report analyzing the so-called Shadders list of Bitcoin addresses. The Court criticized the conduct of Ira Kleiman’s team in producing this supplemental report: the plaintiffs offered Wright the supplemental report at 10:02 p.m. on April 23, only giving Wright until the close of business on the April 24 to schedule a second deposition with Boedeker to examine the new report. In assessing this, the Court expressed suspicion that Boedeker performed last minute analyses following his first deposition to shore up his conclusions in the face of challenges and questioning by Wright’s team. As the Court put it: “The plaintiffs should now be required to live with their decision to not have Mr. Boedeker timely analyze the Shadders List file or offer an opinion on it before the deposition.”

Expert 5: Dr Robert Leonard

Dr. Leonard is a linguistics professor at Hofstra University and was retained by Ira Kleiman to conduct a forensic linguistic authorship analysis on certain documents associated with Dr. Wright—these are comparisons between documents produced in discovery which Wright admits to authoring and the ones he denies. Being an expert for the plaintiffs, he is of the opinion that the documents he was asked to look at are consistent and likely all authored by Wright.

The Court rejected Wright’s attempt to have this thrown out, saying that Dr. Leonard’s testimony is plainly relevant to key issues in the case, particularly as Wright has denied authoring certain emails relating to whether he partnered with Kleiman. As such, the testimony will be allowed at trial.

Next steps

This ruling clears a significant chunk of the parties’ outstanding pre-trial motions, and we now have a clearer picture of which evidence is going to be put before the jury. We are still waiting on another of Dr. Wright’s motions in limine, concerning his attempt to exclude evidence relating to his overseas tax audits into companies associated with Wright which are not party to the Kleiman litigation, as well as the comments from Magistrate Judge Reinhart which denigrated Dr. Wright’s credibility.

The trial is presently set for April 2021.