"Bring Me Her Broom!" - Daubert Developments in Environmental, Health and Natural Resources Litigation

Elliot Eder
Van Cleve & Eder

Federal and even state courts increasingly focus on the trial court's gatekeeping function by applying and interpreting pre-trial evidentiary rules that were announced in a string of 1990s Supreme Court cases commencing with Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786 (1993). Environmental, health and natural resource (EHNR) cases often are tailor-made for Daubert rulings, since technical and scientific expert testimony tends to figure prominently in such cases. This article discusses Daubert ruling trendlines in recent EHNR cases, and how the rulings tend to have a major impact on the litigation outcome. The article is designed to provide a framework to assist litigators in analyzing a Daubert scenario before it is time for a pretrial ruling in an EHNR case.

Trial judges are gatekeepers who must determine if expert testimony is reliable and relevant enough to place before the finder of fact. Some would say that is a role reminiscent of how the Wizard first dealt with Dorothy - he demanded that she bring him the broom before she could seek to persuade the Great and Powerful Oz on the merits. But they also would say that the weeping Doorman first should have barred entry unless and until the Kansas lass could produce the broom as proof she was fit to appear before the wizard who was to judge her petition. Instead, of course, the Doorman was taken in by her generally accepted credentials (writ large in broom emissions - a flagrant discharge without a permit). In a Daubertian world, the judge would be the doorman, performing a valuable gatekeeper's role by deciding whose expert proffers pass the tests of reliability and relevance before the expert can make the case before Oz the factfinder.

As suggested in the following review of cases, however, it is rather hard to predict how high a particular court will set the Daubert bar. Trial courts, and appellate courts on review, essentially get to edit the script. Some courts make admission of the expert testimony rather easy: just edit out all those nightmarish scenes, cut right to Dorothy dousing Her Beautiful Wickedness with water, and straightaway Dorothy gets the broom. Other courts, however, see fit to require rather more when applying the Daubert test: as time slips away from Dorothy, it's a nail-biter as to whether she can rely on her experts to withstand legions of winged monkeys, find the fortress, infiltrate the ranks, storm the tower and suffer the fire - just to nab a broom.

Evaluating Expert Testimony under the Federal Rules of Evidence and Daubert
Effective Dec. 1, 2000, Congress amended Fed.R.Evid. 702 in order to affirm the gatekeeping function for district courts that the Supreme Court announced in the Daubert and Kumho Tire decisions, and to provide general standards that the trial court must use to assess the reliability and helpfulness of proffered expert testimony. The revised language of Rule 702, which has been held not to change the standard for evaluating admissibility of expert opinions articulated by the Supreme Court, provides:

Testimony by Experts - If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.

The expert may base her opinion on facts or data "perceived by or made known to the expert," Fed.R.Evid. 703, and such facts or data need not be admissible in evidence, provided that they are of "a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject." Id. The Daubert decision noted non-exhaustive factors that a district court should apply to determine admissibility of scientific evidence under Rule 702 (which also apply to technical evidence, as the Court clarified in Kumho Tire Co. v. Carmichael, 526 U.S. 137, 119 S.Ct. 1167 (1999)).

The Daubert factors are designed to assist the court, in a flexible inquiry, to use something other than a checklist when determining whether the expert's opinions are based on analysis that is within the range of accepted standards governing how scientists conduct their research and reach their conclusions. For example, has the theory or technique been tested? Has it been subjected to peer review and publication? Is there a high known or potential rate or error associated with the expert's technique? Are there standards controlling operation of the technique? Does the theory or technique enjoy "general acceptance" within a relevant scientific community? 509 U.S. at 592-594. While trial courts have discretion in how they conduct the Daubert analysis, Justice Scalia stressed that the majority made it clear that a court lacks discretion to abandon the gatekeeping function altogether. Kumho Tire, 119 S.Ct. at 1179 (Scalia, J. concurring).

A Daubert ruling may preclude or significantly limit a litigator's ability to present expert testimony that makes or breaks the case. Thus, strategic litigators have found that the best time to analyze a Daubert ruling scenario is long before you prepare for trial, or even for a pretrial Daubert hearing (i.e., if the trial court even schedules such a hearing). Waiting until then to think about whether your expert's methodology will survive judicial scrutiny, or how to challenge the opponent's expert, often results in lost opportunities to maximize prospects for doing so, and one who waits all too often is lost.

A recent CERCLA decision by Judge Posner in Dura Automotive Sys. of Indiana v. CTS Corp., No. 01-1081 (7th Cir. April 4, 2002), provides an excellent example of this timing concern in the name of "responsible science." After settling with EPA over a well field cleanup, Dura's corporate successor was litigating third-party CERCLA liability with CTS. A key issue was whether some twenty years earlier, the distant CTS plant was within the capture zone of the contaminated well field. Well into the case, the court relied on Daubert principles to rule that the key report and testimony of plaintiff's expert Valkenberg wasn't admissible. Judge Posner described an evidentiary gap that the trial court refused to let plaintiff's expert fill: Valkenburg lacked expertise to testify that the plant was within the well field's capture zone without relying on computer modeling technicians at his consulting firm - even though he was independently qualified to testify as to VOC contamination in the well field, and that if situated within the well field's capture zone, CTS's plant may have contributed to the VOC contamination. The computer modeling technicians were not timely designated as experts and did not submit expert reports before the cutoff for doing so had long passed. Plaintiff then proffered their affidavits to cure the evidentiary gap so that Valkenburg's testimony and report could be admitted. The trial court was found to have exercised its discretion reasonably by treating their affidavits as experts' reports that were not timely disclosed, rather than as attestations showing Valkenburg was competent to report the modeling results that others undertook at his direction.

The majority found that Valkenburg's testimony would have "rested on air" without the computer modelers' testimony justifying discretionary technical choices they made. Its use of Daubert principles and amended Rule 702 goes to the heart of the regular practice by expert witnesses, as contemplated in Rule 703, of reasonably relying on facts and data that are not themselves of a type that necessarily is admissible:

The Daubert test must be applied with due regard for the specialization of modern science. A scientist, however well credentialed he may be, is not permitted to be the mouthpiece of a scientist in a different specialty. That would not be responsible science. [For example, a] theoretical economist, however able, could not testify to the findings of an economic study conducted by another economist if he lacked expertise in econometrics and the study raised questions that only an econometrician could answer. If it were apparent that the study was not cut and dried, the author would have to testify; he could not hide behind the theoretician.

In rather draconian terms, the dissent anticipates that the majority's approach will result in a conundrum of infinite regression: at some point, virtually any testifying expert will rely on some other expert's work, such that yet another expert must be deposed/testify, which will reveal reliance on expert C, and so on. Judge Wood's dissent presents the controversy and its implications in stark detail:

Nothing in Daubert, any of the later Supreme Court decisions, or amended Rule 702 requires any such thing; the Daubertapproach is designed only to ensure that an expert's methodology is reliable and accepted rather than quack science. But that one central question was never explored here, because . . . the district court never conducted a Daubert hearing or heard a single CTS expert opine that Valkenburg had made unreliable assumptions or had utilized an unaccepted computer program in reaching his conclusion. . . . [T]he district court and the majority's approach drastically modifies the Daubert analytical framework . . . .

Judge Wood's approach was reflected in a recent Eighth Circuit case that also involved hydrogeology. In U.S. v. Dico, Inc., 266 F.3d 864 (8th Cir.), reh'g den'd en banc, 2001 U.S. App. LEXIS 25281 (8th Cir. Nov. 27, 2001), the Eighth Circuit upheld the trial court's decision to admit testimony from EPA's expert hydrogeologist in a CERCLA cost recovery case. In doing so, the panel noted a common theme in Daubert rulings: that in view of the factual support offered for the opinion of plaintiff's expert, the defendant's concerns really are the basis for cross-examination, since they go to the credibility of the evidence and to what weight defendant's own expert interpretation should receive, not to admissibility under Daubert. EPA's expert presented conclusions as to TCE migration from soils to groundwater, and as to the presence of DNAPL in soil accounting for continued recovery of TCE by remediation wells on Dico's property. The panel rejected defendant's contentions that EPA's expert ignored alternative source evidence, and that it reflected an unreliable methodology. Similarly, in Aero-Motive Co. v. Becker, 2001 U.S. Dist. LEXIS 22137 (W.D. Mich. Dec. 6, 2001), the court rejected Daubert challenges to the admission of expert testimony by both plaintiff and defendants' hydrogeologists, since credibility could be weighed through cross-
examination.

Why Daubert Rulings Matter in Environmental, Health and Natural Resource Litigation

Before continuing, it is worth asking why disputes in such EHNR cases make it likely that Daubert rulings will have a significant impact on outcomes. First, scientific and technical issues tend to arise frequently in environmental, human health and natural resource cases. Second, such issues tend to lie at the heart of the substantive dispute, whereas in many other areas of law, a scientific or technical issue requiring expert testimony may affect an important but not a dispositive issue, such as the level of damages (although it should be noted that a scientific theory relied on to establish or refute causation can be central in many types of cases). In contrast, EHNR litigation by its nature often rises or falls on cutting-edge technology issues, complex risk assessment debates, and/or controversial economic benefit theories requiring expert testimony to explain the theory and apply it in order to put the conclusions into evidence.

Third, outcomes of the admissibility ruling for expert testimony in EHNR cases often present high-stakes scenarios that can dramatically affect the productivity, pocketbook, permitting or siting rights for a defendant, as well as an entire community's sense of health, well-being and compensation or restitution.

Fourth, experts are used to bridge heuristics or data gaps. They need to be filled if a party is to meet its burden of going forward and establish the prima facie elements of its case. Expert testimony often is the only way to do so, particularly in retroactive liability regimes.
The gatekeeping function of trial courts can be discerned in at least three ways. A preliminary ruling is needed to determine whether the proffered expert is qualified to provide opinions in a recognized technical or scientific area, and whether the expert's testimony will be sufficiently relevant to the issue at bar that the factfinder can hear the evidence without undue risk of confusion or prejudice. In addition, the court is likely to assess whether an expert will be using a sufficiently reliable methodology to support technical or scientific conclusions. Finally, the pretrial ruling may take into account whether the expert is relying on adequate and sufficiently reliable data to support the application of a method that itself has been found to pass the threshold level of reliability.

The Unpredictability of Daubert Rulings: A Tale of Two CERCLA Cases

Recent CERCLA cases show that different courts can reach opposite conclusions regarding the admissibility of evidence proffered by experts in very similar disciplines. In both of the following cases, the CERCLA plaintiffs sought to use expert testimony to fill a heuristic: opinion evidence was needed to link the waste stream of defendants to the hazardous substances found at the Superfund site. Such gap-filling is common in CERCLA, particularly regarding historic events that occurred before CERCLA was promulgated in 1980. The disparity between these rulings, and the wreckage left in the wake of one of them, reinforces the need to focus early in a case on more than an expert's conclusions. The focus also needs to be on the underlying methodology, and the quality, quantity and reliability of data used to reach the conclusion.

B.F. Goodrich v. Betkoski, 99 F.3d 505 (2nd Cir. 1996), cert. den'd, __ U.S. __, 118 S.Ct. 2318 (1998), was a CERCLA cost recovery case involving generator and transporter liability for disposal of hazardous substances at two Connecticut landfills. The Second Circuit affirmed the trial court's ruling on the admissibility of an expert affidavit. The expert had used site studies, EPA reports, testimony and other data to correlate specific wastes disposed of by each appellee to specific hazardous substances found at the landfill sites. See also, Gussack Realty Co. v. Xerox Corp., 224 F.3d 85 (2nd Cir. 2000) (in a CERCLA case, affirming rejection of a Daubertchallenge to use of expert testimony that was not based on the experts' own testing and where the experts relied only on data provided by defendant's own experts and government regulators).

The trial court in Betkoski had not placed great weight on the expert's affidavit, but the Second Circuit noted that the affidavit was carefully researched, detailed, directly relevant and based on a proper foundation. The panel stressed that, rather than reflecting junk science, it met the Daubert criteria through reliance on a methodology and data typically used and accepted in CERCLA cases. In denying all parties' request for summary judgment, the panel noted that rather than have the trial court issue a pre-trial ruling that blocked the admissibility of testimony of the plaintiff's expert, the defendants could seek to refute the testimony or weaken it through cross-examination and rebuttal.

The contrast between Betkoski and a more recent Daubert ruling to disallow all reports and testimony by a waste stream reconstruction expert is striking, particularly since the reports and testimony that was not admitted in the private party contribution action of Freeport-McMoran Resource Partners Ltd. Partnership v. B-B Paint Corp., 56 F. Supp.2d 823 (E.D. Mich. 1999), was from an expert whose affidavits and testimony the government has relied on in hundreds of federal enforcement cases. The experts' efforts in each case sound similar, but the way in which underlying data was used, and the expert's methodology, may have accounted for the opposite Daubert rulings.

Freeport-McMoran concerned waste transshipped from the Berlin and Ferro CERCLA site to the Forest Waste CERCLA site in Michigan. Plaintiff relied heavily upon conclusions of its waste stream expert, Dr. Eugene Meyer, in order to establish a causal connection between identified defendants' respective waste streams and the waste that ended up at the Lake Forest site. Based on available information regarding defendants' waste streams, as well as his own experience regarding the type of waste streams and processes involved, Meyer opined as to the type of constituents that most likely would have been found in the defendants' waste. The court excluded Meyer's testimony and reports. Without the expert testimony, plaintiff could not show that hazardous substances were in the transshipped drums for most of the defendants.

The court found that Myer's conclusions were nothing more than his own ipse dixit - an analytical gap that the Supreme Court has held may serve as grounds for a trial court to refuse to admit expert testimony. General Electric Co. v. Joiner, 522 U.S. 136, 118 S.Ct. 512 (1997). Judge Gadola found that Meyer's conclusions were not substantiated by certain site-specific facts; were not shown to be based on generally accepted techniques or professional standards; were not peer reviewed or based on sound science by independent validation of its expert's methodology; and were not grounded on any objective source (e.g., a treatise, professional association's policy statement, or article in a reputable scientific journal) to show that he followed a scientific method.

Particularly in light of the Seventh Circuit's recent ruling in Dura Automotive Systems, another Seventh Circuit decision provides an informative bookend for these reconstructive waste stream analysis cases. The immediacy of photographs in Nutrasweet Co. v. X-L Engineering Co., 227 F.3d 772 (7th Cir. 2000) stands in contrast to experts' waste reconstruction theories that met with such divergent Daubert rulings in the Freeport-McMoran and Betkoski cases.

In Nutrasweet, a company that had paid on-site CERCLA response costs sued a neighboring company for improper disposal of hazardous VOC compounds that allegedly contaminated plaintiff's property. X-L tried to exclude expert testimony, on the theory that it was not based on reliable methods and techniques involving aerial photographs to establish a history of chemical dumping by X-L. The appellate panel affirmed the trial court's rejection of this Daubert challenge. Noting that the use of aerial photos was in conjunction with other tests (e.g., fingerprinting and speciation of the VOCs, permeability of the soils, and groundwater flow rate modeling) to confirm the hypothesis as to defendant's contamination of plaintiff's property, the Seventh Circuit agreed that photographic analysis is a reliable, well-accepted technique. Also noting the expert's proper application of specialized knowledge of reliable techniques and methods, the panel rejected the notion that an expert witness must have direct evidence or a personal observation of defendant's illegal dumping activity. Finally, the panel noted that an expert can rely on data gathered by others, rather than personal observation of the site.

Daubert, Economic Theory and Natural Resource Damages

The reliability of economic theory in environmental and natural resource damage cases has long been a source of controversy - although some critics would find it difficult to choose the less reliable methodology if they were asked to rank resource economics, wersus the hydrogeology or waste reconstruction disciplines discussed above. United States v. Great Lakes Dredge & Dock Co., 259 F.3d 1300 (11th Cir. 2001), cert. den'd, __ U.S. ___ (March 25, 2002) (reported at 2002 U.S. LEXIS 1961), reflects an extremely liberal use of Daubert jurisprudence to admit and economic expert testimony of key importance to the government's damages case. A towed dredge pipe left a large blow hole and some 13 miles of pipe scarring that destroyed large areas of a delicate sea bottom ecosystem in the Florida Keys National Marine Sanctuary. The government relied on an expert's habitat equivalency analysis (HEA) to establish damages for compensation for the interim lost use of the resources (e.g., scaling the equivalent area to be restored by quantifying its size) and the cost of acquiring equivalent resources.

In upholding use of the HEA as an appropriate method for determining damages, the Eleventh Circuit cited only one Daubert factor: the fact that the HEA was peer reviewed and accepted. Instead of noting any other record evidence, the panel stressed that trial courts have "ample discretion" to assess the scientific validity of the reasoning or methodology underlying expert testimony, and the proper application of that methodology to the facts at issue. The appellate court did not recognize a Daubert issue in the parties' conflicting views as to how to interpret data underlying the HEA, and as to its quality. Instead, the appellate panel simply affirmed that such HEA-related debates are relevant to the appropriate weight that should be given to each expert's opinion.

Expert Opinions of Contaminated Land Value Due to Health Effects

Expert testimony concerning a far less complicated form of economics - the appraisal of land value - was roundly rejected on Daubert grounds in Rockwell Int'l Corp. v. Wilhite, 1997-CA-000188-MR (Ky. Ct. App. 2000). At issue was whether expert testimony could support a finding that the deposit of "relatively small quantities of PCBs on the landowners' properties" near a Rockwell facility in Kentucky rendered the properties valueless. Even viewing the evidence from a standpoint most favorable to the prevailing landowners, the appellate court reversed the jury verdict, because the trial court should have excluded expert testimony, and granted Rockwell's motion for a directed verdict or for judgment notwithstanding the verdict. The Court of Appeals applied a Daubert analysis to find that plaintiff farmers' nine experts failed to show that PCBs at levels found on the properties presented a health hazard. The appellate panel identified the problem as a trial court allowing an expert's ipse dixit, despite the Supreme Court's admonition in Joiner, to serve as a basis for inadmissible expert testimony that any level of PCB contamination, no matter how slight, renders property worthless to its human or animal occupants, or to crops, even absent proof of harm to the property.

Daubert has been described as a two-sided coin. It is expansive on one side, since its open-ended use of multiple factors means that admissibility does not rise or fall based only on whether it meets the single, consensus-based "general acceptance" test that was announced in the Frye standard in 1923. But on the other side, the Daubert approach is restrictive, with a focus on the trial court's responsibility as a gatekeeper on reliability. See Minner v. American Mtg. & Guaranty Co., No. 96C-09-263-WTQ (Sup. Ct. Del. April 17, 2000). Further, the relevance inquiry at the Daubert ruling stage takes the trial judge deeper into fact finding as to the threshold decision on the admission of evidence. EHNR case litigators need to take into account that courts will not simply admit opinions of credentialed experts into evidence and leave it for the factfinder to evaluate.

Elliot Eder (Harvard University, B.A.; Boston University, J.D.) litigates and counsels on environmental, health and natural resource damage cases, as well as commercial disputes and insurance issues, at Van Cleve & Eder in Washington, D.C. (eevcalaw@erols.com ). He is the author of "The Standards of Admissibility of Scientific and Technical Evidence" in the Scientific Evidence and Experts Handbook, published by Aspen Law & Business and as an online evidence library treatise at http://www.loislaw.com.