The plaintiffs in Sims v. Kia Motors brought products liability claims about the design of a fuel tank. Their main engineering expert “employed a ‘differential diagnosis approach, a scientific technique that essentially involves the process of elimination.” While a potentially reliable technique, the Fifth Circuit noted that it “has cautioned that “the results of a differential diagnosis are far from reliable per se..’ . . . “[M]erely “ruling out” other possible explanations is not enough to establish reliability; experts must also have some scientific basis for ‘ruling in’ the phenomenon they allege.” Here, where “the record does not reflect any reliable facts or data ‘ruling in'” the expert’s theory about how the fuel tank behaved in the accident, “the district court did not abuse its discretion in excluding it.” No. 15-10636 (revised Oct. 11, 2016).
OTM, the owner of two boats, alleged a poor repair job by Diversified. The district court granted summary judgment for the defendant and the Fifth Circuit reversed, observing: “OTM concedes it has not attempted to prove the ‘precise cause’ of the engines’ malfunction; instead, it maintains it presented sufficient evidence to create the requisite
genuine dispute of material fact for whether the claimed substandard overhauls by Diversified caused the engines’ breakdown. . . . [A]t this stage, OTM is not required to prove exactly which part failed, or disprove that ‘the vessels’ other deteriorating parts or operator error’ was not the cause of the vessels’ breakdown . . . . ” Operaciones Tecnicas Marinas, SAS v. Diversified Marine Services, LLC, No. 15-30932 (Aug. 5, 2016, unpublished). The opinion illustrates the interaction between the requirements of Rule 56 and the requirement of Daubert case law that an expert adequately exclude alternative causes.
In the trial of a dispute about the handling of another lawsuit, the plaintiffs’ lawyer in that other suit testified that he would not have settled for less than $3 million. On appeal, two expert reports were cited in opposition to that testimony, and the Fifth Circuit rejected them. It noted that the trial court was within its rights to credit the lawyer’s testimony, and that the reports had been prepared pretrial and thus could not have addressed that testimony. RSUI Indemnity Co. v. American States Ins. Co., No. 15-30976 (July 8, 2016, unpublished).
Carlson alleged injuries from the ProNeuroLight, an infrared therapy device. At trial, the defendants called a chiropractor with some experience using the device. The Fifth Circuit expressed skepticism about his qualifications, noting: “While he does make diagnoses and orders tests as part of his chiropractic and alternative medicine practice, [his] qualifications do not align with or support his challenged medical causation testimony.” The Court did not rule on that basis, however, instead finding that “a district court must . . . perform its gatekeeping function by performing some type of Daubert inquiry and by making findings about the witness’s qualifications to give expert testimony.” Here, admitting the chiropractor’s testimony without taking those steps was an abuse of discretion. The Court found harm, noting that he was the sole defense witness, that his testimony was cited in closing, and that the defendants won. Accordingly, it reversed and remanded. Carlson v. Bioremedic Therapeutic Systems, Inc., No. 14-20691 (May 16, 2016).
The Fifth Circuit issued a revised opinon in Kovaly v. Wal-Mart Stores, No. 14-20697 (Sept. 22, 2015, unpublished). The new opinion reaches the same result — reversal of the Daubert exclusion of an expert about the standard of care for a Texas pharmacist asked to issue a 72-hour emergency prescription. It provides more detail about the expert’s analysis, eliminating some uncertainty in the original opinion about the role of Texas regulations in the expert’s work: “Brooke specifically analyzed how the various regulations overlap and how the history of the regulations led to the codification of particular exceptions but not others. He explained that his opinion was based not only on the regulations but also on their history, accepted practice, and pharmacist training.”
In the wake of the Deepwater Horizon accident, plaintiffs sought to bring two class actions against BP alleging violations of federal securities law — one regarding BP’s representations about its pre-spill safety procedures, and one about BP’s post-accident statements as to the flow rate of oil after the spill occurred. The district court certified the post-spill class, concluding that the plaintiffs had established a model of damages consistent with their liability case and capable of measurement across the class, and refused to certify the pre-spill class, finding that it had not satisfied the “common damages” burden established by the Supreme Court in Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013). The Fifth Circuit affirmed. As to the post-spill class, the Court reviewed BP’s criticisms of the plaintiffs’ damages expert, and found that they were not so potent as to invalidate his theory at the class certification stage. As to the pre-spill class, however, the Court agreed that the expert failed to exclude class members who would have bought the stock even with full knowledge of the alleged risks, making his analysis infirm for certification purposes. Ludlow v. BP, PLC, No. 14-20420 (revised Sept.15, 2015).
Bartos, an injured seaman, sued for future lost wages. His expert offered calculations based on a retirement age of 55.8 (from a table of work-life expectancies) or 67 (the Social Security full-retirement age). The Fifth Circuit reversed a damages award based on the older age and rendered an award based on the younger one, reasoning: “Barto’s economist did not provide any reason to believe that Barto would continue to work past his statistical work-life expectancy. The only relevant evidence Barto presented at trial was his testimony that he plans to work ‘[a]s long as I can retire. Whatever the retirement age is.’ This scant evidence was not enough to show that Barto ‘by virtue of his health or occupation or other factors, is likely to live and work a longer, or shorter, period than the average.'” Barto v. Shore Construction LLC, No. 14-31326 (revised Sept. 29, 2015).
The issue in Kovaly v. Wal-Mart was whether a pharmacist was negligent in not providing a 72-hour emergency supply of a patient’s medicine, despite some confusion about the quantity in the prescription issued by the patient’s physician. No. 14-20697 (Aug. 12, 2015, unpublished). The district court found that Brooke, the plaintiff’s expert, was well-qualified by experience and training to testify about the standard of care. The district court went on to hold, however, that “nothing in the regulations definitively authorizes a pharmacist to provide a 72-hour emergency supply for an original prescription, and it concluded that doing so would actually violate Texas law,” and thus excluded his opinions as unreliable. The Fifth Circuit reversed, concluding: “Even if Brooke’s opinion that the pharmacist legally could have filled the emergency supply is an incorrect interpretation of Texas law, that does not render it unreliable in light of his qualifications, experience, and foundation for the opinion.” In support, the Court cites several cases about the ultimate “correctness” of an expert’s factual conclusion.
Plaintiffs sued Whirlpool, alleging that a gas range it manufactured made them sick from carbon monoxide emissions. They offered two causation experts, whose testimony was stricken by the district court under Daubert, which the Fifth Circuit affirmed. The first opined about the “general causation” link connection between carbon monoxide and health problems, but the main studies he relied on involved significantly higher concentrations than what was measured in Plainitffs’ apartment. The second, an “accomplished engineer with significant expertise in vehicular accident reconstruction and fire and explosion analysis,” did not have expertise on the issue in this case: “No gas appliance fire is at issue in this case; rather, the core claim here is that the gas range was defective because it emitted carbon monoxide in excess of an amount that is safe.” Macy v. Whirlpool Corp., No. 14-20603 (June 4, 2015, unpublished).
Plaintiff alleged birth defects from the prescription of metoclopramide, off-label, to control nausea during pregnancy. The prescribing doctor gave “unequivocal” deposition testimony that he chose the medicine because of his clinical experience, and had no contact with marketing efforts by the drug manufacturer. Accordingly, preempted or not, plaintiff’s claims failed for lack of causation. Whitener v. Pliva, Inc., No. 14-30468 (April 9, 2015, unpublished).
The issue in Lowman v. Jerry Whitaker Timber Contractors, LLC was whether certain timber companies had vicarious liability for allegedly unlawful logging activities, in DeSoto Parish, Louisiana, in violation of that state’s timber cutting statute. Evidence showed that the loggers sold timber to the mills and in return received a “scale ticket” — a sort of commercial paper that can be bought and sold and allows small loggers immediate access to sale proceeds — which featured a description of the wood. Plaintiffs offered an affidavit from a state investigator who described the defendants’ “prior schemes involving the theft of timber and the falsifying of scale tickets,” and opined that he saw “‘the same pattern’ of activity” here. The Fifth Circuit affirmed summary judgment for the defendants, finding that the evidence showed no connection between the tickets he reviewed and the timber at issue, much less any “right of control or supervision” by the defendants over the loggers. No. 14-30787 (Feb. 10, 2015, unpublished).
The trustee of a litigation trust formed from the bankruptcy of Idearc, Inc. sued its former parent, Verizon, alleging billions of dollars in damages in connection with its spinoff. After a bench trial and several other orders, the district court ruled in favor of defendants, and the Fifth Circuit affirmed in U.S. Bank, N.A. v. Verizon Communications, No. 13-10752 (revised Sept. 2, 2014).
The opinion, while lengthy, still only hints at the complexity of the case, and much of its analysis is fact-specific. Some of the issues addressed include:
1. A bankruptcy litigation trust does not have a right to jury trial on a fraudulent transfer claim, when the defendant creditor has filed a proof of claim in the bankruptcy, and the bankruptcy court must resolve whether a fraudulent transfer occurred to rule on that claim (analyzing and applying Langemkamp v. Culp, 498 U.S. 42 (1990), in light of Stern v. Marshall, 131 S. Ct. 2594 (2011)).
2. In the context of determining whether the district court reviewed an earlier ruling correctly, on pages 26-27, the Court provided crisp definitions of the basic concepts of dictum and holding.
3. In the course of rejecting an argument about the refusal to admit several pieces of evidence, the Court noted that the trustee “does not discuss how each specific piece of evidence was likely to affect the outcome of the trial, in light of all the evidence presented.”
4. A defense expert, without experience in the particular industry, was still qualified to speak to valuation methodology in the bench trial, and “we cannot reverse the district court for adopting one permissible view over the other.”
5. The Court thoroughly reviewed the fiduciary duties owed from a parent to a subsidiary under Delaware law, while affirming the district court’s conclusions about causation associated with their alleged breach.
Aransas Project v. Shaw presented a challenge to an injunction against the Texas Commission on Environmental Quality, prohibiting the TCEQ from issuing new permits to withdraw water from rivers that feed the estuary where whooping cranes live. No. 13-40317 (June 30, 2014). The whooping crane, described in the opinion as a “majestic bird that stands five feet tall,” is an endangered species, and the only known wild flock lives in Texas during winter.
The Fifth Circuit first rejected an argument for Burford abstention, finding that this case presented a “broader grant of administrative and judicial authority by state law to remedy environmental grievances” than a prior opinion where it allowed abstention in a similar sort of environmental dispute. Cf. Sierra Club v. City of San Antonio, 112 F.3d 789 (5th Cir. 1997).
The Court then reversed the injunction, finding no causation “in the face of multiple, natural, independent, unpredictable and interrelated forces affecting the cranes’ estuary environment.” While couched in language about proximate causation and environmental law, the Court’s analysis is a classic illustration of the recurring Daubert problem of excluding alternate causes. (In the course of this discussion, the butterfly effect theory makes a cameo appearance in footnote 10.)
At issue in Meadaa v. K.A.P. Enterprises LLC was the relative liability of three defendants for a $3.5 million claim. No. 12-30918 (July 1, 2014). In a summary judgment affidavit, an expert opined that transactions of Defendant 1 had not resulted in unfair advantage to Defendants 2 and 3, and had kept its affairs separate from those of Defendant 4. The expert had reviewed financial documents from Defendant 1 and tax returns from Defendant 4. The Fifth Circuit found no clear error in the district court’s striking of this affidavit for a lack of personal knowledge. Because “[i]t is by no means clear how a [CPA] can obtain personal knowledge of the effects of the actions of one entity on other parties without reviewing the latter’s financial documents,” it was “incumbent upon him to explain how he acquired such knowledge.” As a procedural matter, the Court also found that a notice of appeal from a final judgment encompassed a later ruling on a Rule 59 motion.
Ayala was killed by a propane heater explosion; his estate sued the manufacturer for damages. Ayala v. Enerco Group, 13-30532 (May 28, 2014, unpublished). Ayala’s wife testified that he was generally careful with the heater, although she did not observe him at the time of the accident. An expert identified several possible defects with the heater, but: “[There was no evidence to suggest the Ayalas’ heater itself was defective. He did not perform a structural analysis of the Mr. Heater or destructive testing of an example unit. His conclusions supporting that there could be a leak were based solely on the nature of the item itself. McPhate also admitted that he could not rule out other potential sources of a propane leak other than a defect in the heater, such as a faulty propane bottle or a failure by Mr. Ayala to secure the valve properly on the heater.” Accordingly, the estate’s claims failed. A sanctions award against the plaintiff’s counsel under 28 U.S.C. § 1927 for filing a second lawsuit was reversed because that filing did not show a “persistent” pattern of vexatious litigation as required by that statute.