Court filing
Exhibit 23 Feinstein Excerpts — Marshall v. Prestamos CDFI, LLC (Dkt. 142-28, E.D. Pa. No. 5:21-cv-04337)
Filed August 28, 2024 in Marshall v. Prestamos CDFI, LLC; one of 344 filings from this case.
Record facts
| Court | U.S. District Court for the Eastern District of Pennsylvania |
|---|---|
| Filed | 2024-08-28 |
U.S. District Court for the Eastern District of Pennsylvania · No. 5:21-cv-04337-JMG · Doc. 142-28 · 2024-08-28 · Docket on CourtListener
Full text
Ex. 23 – Excerpts of Deposition of Stephen Feinstein,
dated August 28, 2024
Case 5:21-cv-04337-JMG Document 142-28 Filed 10/04/24 Page 1 of 6
Deposition of Steven Feinstein, Ph.D
Alicia Marshall, et al. v. Prestamos CDFI, LLC
215-341-3616 transcripts@everestdepo.com
Everest Court Reporting LLC
Page: 1 (1)
1
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
2
3
ALICIA MARSHALL, et : CASE NO.
al., individually and : 5:21-ev-04337-JMG
4
on behalf of all :
others similarly :
5
situated, :
Plaintiffs :
6
:
vs. :
7
:
PRESTAMOS CDFI, LLC, :
8
Defendant :
9
* * *
10
WEDNESDAY, AUGUST 28, 2024
11
* * *
12
13
Oral deposition of STEVEN FEINSTEIN,
14
PH.D., taken remotely, commencing at
15
10:09 a.m. before Debbie Leonard, Registered
16
Diplomate Reporter, Certified Realtime
17
Reporter.
18
19
20
21
22
23
24
25
Case 5:21-cv-04337-JMG Document 142-28 Filed 10/04/24 Page 2 of 6
Page 5
1 * * *
2 (The witness was placed under
3 oath.)
4 * * *
5 MR. LEDERER: Pardon me.
6 Before you even go on, I know that you
7 just swore in the witness,
8 Ms. Leonard, but I had a really hard
9 time hearing anything. I'm not sure
10 if anyone else shared that.
11 THE REPORTER: I am going to go
12 off the record.
13 * * *
14 (Off-the-record discussion.)
15 * * *
16 STEVEN FEINSTEIN, PH.D.,
17 having been first duly sworn, testified as
18 follows:
19 * * *
20 EXAMINATION
21 * * *
22 BY MR. PRATT:
23 Q. Good morning, Dr. Feinstein.
24 How are you?
25 A. Good. Good morning.
Page 6
1 Q. My name is Marcel Pratt. I'm a
2 lawyer with the law firm Ballard Spahr, and I
3 represent the defendant in this case,
4 Prestamos CDFI LLC.
5 Could you state your full name
6 for the record?
7 A. Steven Phillip Feinstein.
8 Q. And, Dr. Feinstein, what is
9 your business address?
10 A. I'm a professor at Babson
11 College. The address there is Babson
12 College, Finance Division, Tomasso Hall,
13 Babson Park, Massachusetts 02457.
14 I also have a consulting firm
15 that has a different address. I can give you
16 that address, too, if you would like it.
17 Q. Yes. What's the address --
18 what's the name and address of your
19 consulting firm?
20 A. The firm is Crowninshield
21 Financial Research, Inc., 56 Harvard Street,
22 Brookline, Massachusetts 02445.
23 Q. Thank you. And I take it
24 you've been deposed before?
25 A. Yes.
Page 7
1 Q. About how many times?
2 A. Many. At least a hundred --
3 Q. So I'm going to --
4 A. -- over the last 30 years.
5 Q. So I'm going to give you some
6 instructions that I'm sure you've heard
7 before.
8 As you're aware, there's a
9 court reporter taking down my questions and
10 your answers. She can only take down one
11 person speaking at a time, so if I ask a
12 question, please give me time to finish
13 before you respond. Also speak slowly,
14 clearly, so that we can accurately capture
15 your answers.
16 If you need to take a break at
17 any point, please let me know. My only
18 request on that score is that if you need to
19 take a break while a question is pending,
20 please answer the question first.
21 Is there any reason that you
22 are not able to tell the truth today?
23 A. No.
24 Q. Are you on any medications or
25 substances that would prevent your ability to
Page 8
1 testify accurately?
2 A. No.
3 Q. So could you walk us through
4 your educational background.
5 A. Sure. So I went to college,
6 undergraduate, at Pomona College in
7 California. I graduated in 1981.
8 I then went to graduate school
9 in a Ph.D. program in economics at Yale
10 University and received two master's degrees
11 in the 1980s and my Ph.D. in economics with a
12 concentration in finance in 1989.
13 In addition to that -- I mean,
14 that's my formal university education.
15 I have been teaching at the
16 university level since 1990, and along the
17 way, I sat for and received the chartered
18 financial analyst designation, which is a
19 premier practitioner designation in financial
20 analysis.
21 Q. In your educational studies,
22 have you ever studied the Small Business
23 Administration?
24 A. I've come across it. It's
25 never been a focus of a course or an article,
Deposition of Steven Feinstein, Ph.D
Alicia Marshall, et al. v. Prestamos CDFI, LLC
215-341-3616 transcripts@everestdepo.com
Everest Court Reporting LLC
Page: 5 (5 - 8)
Case 5:21-cv-04337-JMG Document 142-28 Filed 10/04/24 Page 3 of 6
Page 29
1 A. I think it's in the
2 neighborhood of that.
3 Q. Okay. So could you describe
4 generally what you were asked to do by
5 plaintiffs in this case.
6 A. Sure. Well, it's in my report,
7 the scope of the engagement. I was asked to
8 review the Complaint, understand the
9 Complaint and the allegations, read some
10 other background reference materials that are
11 cited and referenced in the Complaint and
12 other case documents.
13 And based on that and my
14 expertise, opine, you know, formulate an
15 opinion as to whether or not damages could be
16 calculated using a common methodology for all
17 class members, members of the proposed class,
18 using the -- in a method that is both
19 feasible and consistent with plaintiffs'
20 theory of liability.
21 Essentially, they're asking a
22 yes or no question about whether damages
23 could be computed commonly.
24 Q. So we want to introduce as
25 Exhibit 1 your report.
Page 30
1 * * *
2 (Exhibit 1 marked for
3 identification.)
4 * * *
5 BY MR. PRATT:
6 Q. Okay. Dr. Feinstein, do you
7 have a copy of your report with you?
8 A. I don't. I can get one during
9 a break, but I don't right now.
10 Q. Okay. Well, let's -- let's see
11 how we fare using what is on the screen. And
12 if you have issues, we can take a break for
13 you to get a copy.
14 Does that sound okay?
15 A. Sure.
16 Q. Okay. So do you -- do you
17 recognize this document on the screen?
18 A. Well, if I had the report in
19 front of me, I would scroll down to the
20 signature page.
21 Q. The very first page says
22 report -- the very first page says Report on
23 Damages Methodology, Professor Steven P.
24 Feinstein, Ph.D., CFA, July 12, 2024,
25 correct?
Page 31
1 A. It does say that.
2 Q. Okay. And we're going to
3 scroll down to the signature page. Okay. Do
4 you see page 12 --
5 A. I do.
6 Q. -- of this document?
7 A. I do.
8 Q. And is that your signature at
9 the bottom?
10 A. It is.
11 Q. Is this the report that you
12 submitted in this litigation?
13 A. Yes.
14 Q. And you submitted a rebuttal
15 report as well, correct?
16 A. I'm not sure whether it was
17 called rebuttal or reply. But either way,
18 yes.
19 Q. Okay. So we're going to focus
20 on this initial report for the time being.
21 We're going to go back up to the top.
22 A. Could I see page 2, or 1 or 2,
23 just for a second? And let's keep going.
24 There's something I'm looking for, and I want
25 to -- in order to just verify a prior answer
Page 32
1 I gave. Page 2. I guess it would be on
2 page 3. Let's try one more page. No. Let's
3 try page 4. There it is.
4 Yeah, so my rate is in
5 paragraph 21. That's the rate for
6 engagements that begin in 2024. That's the
7 rate for this case.
8 Q. Okay. Understood. I want to
9 direct your attention to paragraph 1.
10 A. Okay.
11 Q. Paragraph 1, you wrote, "I was
12 asked by Bailey & Glasser LLP, co-counsel for
13 the plaintiffs, to determine whether damages
14 in this matter can be computed for all Class
15 members using a common methodology that is
16 consistent with Plaintiffs' -- with the
17 plaintiffs' theory of liability."
18 Did I read that correctly?
19 A. That's right.
20 Q. What is a common methodology?
21 A. That means the same formula for
22 calculating damages would be used for all
23 class members. It's common among all class
24 members.
25 Q. And what is plaintiffs' theory
Deposition of Steven Feinstein, Ph.D
Alicia Marshall, et al. v. Prestamos CDFI, LLC
215-341-3616 transcripts@everestdepo.com
Everest Court Reporting LLC
Page: 11 (29 - 32)
Case 5:21-cv-04337-JMG Document 142-28 Filed 10/04/24 Page 4 of 6
Page 129
1 other than their own statement that they
2 would have used it for an appropriate
3 purpose, correct?
4 A. Well, there's their own
5 statement that says that that's what their
6 intention was.
7 There's the fact that
8 there's -- in the hypothetical -- we don't
9 have any evidence from the hypothetical world
10 because it never happened.
11 And then we also have abundant
12 evidence that even if there are some
13 deviations, the SBA still granted
14 forgiveness, as your example that's on the
15 screen attests to.
16 Q. So do you -- in your mind, is
17 there a probability that you would assess on
18 whether or not a named plaintiff would have
19 received forgiveness?
20 A. I don't have a set probability,
21 but I think the probability that they would
22 not have is negligible.
23 Q. Do you think the probability
24 that the named plaintiffs in this case would
25 have received forgiveness is 99 percent?
Page 130
1 A. We know -- look, obviously,
2 we're estimating what might have happened in
3 a hypothetical that never occurred. And
4 we're mixing up the economic and statistical
5 issues with legal liability issues. So we
6 really ought to sort this out for this
7 discussion.
8 If -- it's -- from the -- I'm
9 not a lawyer, but my understanding of the
10 liability -- theory of liability that I'm
11 assuming for purposes of constructing the
12 damage model holds the defendants liable for
13 not funding and holds the defendants liable
14 for not -- for preventing forgiveness.
15 So that's -- so, you know,
16 there's good reason to assume it for that
17 reason.
18 The statistics tell us that it
19 was virtually assured that anyone who applied
20 for forgiveness got it. It's an incredibly
21 small percentage, half a -- fraction of a
22 percent of people that didn't get it.
23 And the document you have on
24 the screen right now tells me that the
25 program was so lenient that even if there
Page 131
1 were some deviations, if someone was
2 desperate to clear their name, you know, and
3 signed something, they would get forgiveness
4 anyway, even if it wasn't a hundred percent
5 accurate.
6 Q. Okay. So have you assumed in
7 your analysis that a hundred percent of the
8 class would have received [indiscernible]?
9 THE REPORTER: I'm sorry.
10 MR. LEDERER: Would have
11 received what? Pardon me.
12 THE REPORTER: Yeah, you're
13 going to have to repeat that for me.
14 MR. ZINI: Me too.
15 BY MR. PRATT:
16 Q. In your analysis, are you
17 assuming that 100 percent of the class would
18 have received forgiveness?
19 A. No. I am concluding that the
20 amount -- I'm concluding that that's -- that
21 there's a negligible probability that they
22 would not have. And the issue is mixed with
23 the question of liability, which is a merits
24 question beyond the scope of an economist.
25 Q. Okay. So I'm going to ask you
Page 132
1 again. Is there a probability that you have
2 assessed -- just yes or no. Is there a
3 probability that you have assessed --
4 A. I said -- I said --
5 Q. Dr. Feinstein, let me finish
6 the question.
7 Yes or no. Is there a
8 probability that you have assessed as to
9 whether or not a named plaintiff in this case
10 would have received PPP forgiveness if they
11 had received their loan funds?
12 MR. LEDERER: Objection to the
13 form of the question.
14 THE WITNESS: So when you say
15 "a probability," you mean a particular
16 number or a characterization of the
17 probability such as that it's
18 negligible?
19 BY MR. PRATT:
20 Q. A particular number.
21 A. No, but there is the
22 characterization. It's negligible. The
23 statistics bear it out.
24 Q. But you are -- when you keep
25 citing statistics, are you talking about the
Deposition of Steven Feinstein, Ph.D
Alicia Marshall, et al. v. Prestamos CDFI, LLC
215-341-3616 transcripts@everestdepo.com
Everest Court Reporting LLC
Page: 36 (129 - 132)
Case 5:21-cv-04337-JMG Document 142-28 Filed 10/04/24 Page 5 of 6
Page 169
1 * * *
2 (Exhibit 10 marked for
3 identification.)
4 * * *
5 BY MR. PRATT:
6 Q. Earlier I had asked you whether
7 your damages methodology in the Greathouse
8 case was the same as the damages methodology
9 in this case.
10 Would it help to look at your
11 report to answer my question?
12 A. Sure. Let me -- do you mind if
13 I kind of pull it up on my own computer
14 screen so I can read through it quickly?
15 Q. I think that's fine so long as
16 you're not looking at other notes.
17 A. No, it would be -- I'll promise
18 you it's exactly the same document you have
19 here. It just would be easier.
20 You know, I don't have it. I
21 don't have it. There's one more place I can
22 find it. Or we could just scroll through
23 yours if you want. That would be fine, too.
24 Here, I'll move over here.
25 Q. I'm going to direct your
Page 170
1 attention to paragraph 25 of this report.
2 A. Okay.
3 Q. Paragraph 25 says, "Therefore,
4 assuming Plaintiffs establish liability, each
5 Class member's damages are at a minimum the
6 respective amount of their SBA-approved PPP
7 loan that CPF failed to fund. That is, each
8 class member's damages are at least equal to
9 the amount of the SBA-approved PPP loan minus
10 the amount received, if any. Given the facts
11 and circumstances of this case, and assuming
12 Plaintiffs' allegations are true, the amount
13 of the SBA-approved, but unfunded PPP loan is
14 an appropriate and conservative measure of
15 damages for every Class member. I also
16 understand that in lieu of damages or to
17 express damages differently, Plaintiffs would
18 be amenable to receiving their PPP loan
19 funding in full with interest."
20 Does that refresh your
21 recollection as to whether the damages
22 methodology in Greathouse was the same as
23 this case?
24 A. Could I see the next page,
25 page 7?
Page 171
1 Yeah, so they're the same,
2 because my report in this case said that at a
3 minimum, the damages are the unfunded amount
4 of the SBA loan, and that's what I said in
5 Greathouse.
6 In this case, I said that in
7 addition to that, there's consequential
8 damages, and I said that in Greathouse.
9 In Greathouse, I said that if
10 we exclude any element for consequential
11 damages, it would be a conservative measure,
12 and that's true.
13 Q. Thank you. We can take this
14 down.
15 Are you aware that the Court
16 denied class certification in the Greathouse
17 case?
18 A. I'm aware.
19 Q. And do you know whether or not
20 the Court cited to or relied on your opinion?
21 A. I know the Court had no
22 objection to my opinion. There was no
23 exclusion or criticism of my opinion in
24 Greathouse.
25 Q. But the Court did not consider
Page 172
1 your opinion, or did it?
2 MR. LEDERER: Objection to
3 form.
4 THE WITNESS: That -- I'm not a
5 lawyer. I don't think they -- I don't
6 know one way or the other.
7 BY MR. PRATT:
8 Q. Have you reviewed the rebuttal
9 report of Jorge Baez?
10 A. Yes.
11 Q. And do you disagree with any of
12 his opinions?
13 A. Yes.
14 Q. Do you know which ones?
15 A. No. I mean, I -- I can't
16 verbally give you a rebuttal here. I did
17 cite to some of the things today, but I -- I
18 couldn't give you a comprehensive critique,
19 as I sit here now.
20 MR. PRATT: I think we're
21 getting close to being finished. I
22 just want to take another five
23 minutes.
24 MR. LEDERER: Okay.
25 * * *
Deposition of Steven Feinstein, Ph.D
Alicia Marshall, et al. v. Prestamos CDFI, LLC
215-341-3616 transcripts@everestdepo.com
Everest Court Reporting LLC
Page: 46 (169 - 172)
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