Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-55147/USCOURTS-ca9-12-55147-0/pdf.json

Nature of Suit Code: 385
Nature of Suit: Property Damage - Product Liability
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CITY OF POMONA,

Plaintiff-Appellant,

v.

SQM NORTH AMERICA

CORPORATION,

Defendant-Appellee.

No. 12-55147

D.C. No.

2:11-cv-00167-

RGK-VBK

CITY OF POMONA,

Plaintiff-Appellee,

v.

SQM NORTH AMERICA

CORPORATION,

Defendant-Appellant.

No. 12-55193

D.C. No.

2:11-cv-00167-

RGK-VBK

OPINION

Appeal from the United States District Court

for the Central District of California

R. Gary Klausner, District Judge, Presiding

Argued and Submitted

October 11, 2013—Pasadena, California

Filed May 2, 2014

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2 CITY OF POMONA V. SQM

Before: Harry Pregerson and Richard C. Tallman, Circuit

Judges, and Michael H. Simon, District Judge.*

Opinion by Judge Simon

SUMMARY**

Expert Testimony

The panel affirmed in part and reversed in part the district

court’s order, and remanded for trial in a case involving

perchlorate contamination found in the City of Pomona’s

water system.

The City of Pomona alleged that SQM North America

Corporation’s importation of sodium nitrate for fertilizer was

the primary source of Pomona’s perchlorate contamination.

The district court denied SQM’s motion for summary

judgment, and following a pre-trial Daubert hearing, granted

SQM’s motion in limine to exclude the expert testimony of

Dr. Neil Sturchio, Pomona’s expert witness on causation. 

The parties stipulated to a conditional dismissal and sought

review of the district court’s order excluding the testimony,

and other rulings.

* The Honorable Michael H. Simon, District Judge for the U.S. District

Court for the District of Oregon, sitting by designation.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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CITY OF POMONA V. SQM 3

Reversing the district court’s exclusion of the expert

testimony, the panel held that facts casting doubt on the

credibility of an expert witness and contested facts regarding

the strength of a particular scientific method are questions

reserved for the fact finder. Affirming the district court’s

denial of SQM’s motion for summary judgment, the panel

held that there was a genuine factual dispute as to whether the

City of Pomona’s claims were barred by California’s

economic loss rule or by the applicable statute of limitations. 

The panel remanded for a trial.

COUNSEL

Victor M. Sher (argued), and Todd E. Robins, Esther L.

Klisura, and Jed J. Borghei, Sher Leff, LLP, San Francisco,

California; Arnold M. Alvarez-Glasman and Andrew L.

Jared, Alvarez-Glasman & Colvin, City of Industry,

California, for Plaintiff-Appellant/Cross-Appellee.

Michael K. Johnson (argued), and R. Gaylord Smith, Malissa

Hathaway McKeith, and Lisa Willhelm Cooney, Lewis

Brisbois Bisgaard & Smith, LLP, San Franscisco, California,

for Defendant-Appellee/Cross-Appellant.

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4 CITY OF POMONA V. SQM

OPINION

SIMON, District Judge:

After excessive levels of the chemical perchlorate were

found in a city’s water system, the city undertook to

investigate the source of that contamination and remediate.

Using a methodology known as “stable isotope analysis,” a

scientist hired by the city determined that the most likely

dominant source of the perchlorate found in the city’s

groundwater was sodium nitrate that had been used as

fertilizer. The sodium nitrate had been imported in large

quantities from Chile several decades earlier and had been

used as fertilizer over a substantial period of time. The city

sued the company that imported the sodium nitrate into the

United States. Before trial, the district court held an

evidentiary hearing under Daubert v. Merrell Dow

Pharmaceuticals, Inc., 509 U.S. 579 (1993), and excluded the

city’s expert witness. The parties then entered into a

conditional stipulated dismissal to facilitate the appeal of the

district court’s evidentiary ruling, among other issues.

Because the district court abused its discretion by not

allowing a jury to resolve contested but otherwise admissible

expert testimony, we reverse the district court’s order of

exclusion, affirm the district court’s denial of the defendant’s

motion for summary judgment on other issues, and remand

for trial.

BACKGROUND

The City of Pomona, California (“Pomona”), administers

a public water system. Pomona receives its water from the

Chino Basin aquifer using a set of 14 wells that connect to

Pomona’s groundwater treatment facility. In 2007, the Chino

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CITY OF POMONA V. SQM 5

Basin aquifer was found to have levels of the chemical

perchlorate in excess of the Maximum Contaminant Level

(“MCL”) of six parts per billion (“ppb”) permitted by the

California Department of Public Health (“CDPH”).

CDPH regulates contaminants in drinking water through

several standards, including MCLs and Action Levels. MCLs

are legally enforceable numerical standards, statutorily

defined as “the maximum permissible level of a contaminant

in water.” Cal. Health & Safety Code § 116275(f). CDPH

has the power to suspend or revoke a municipality’s water

system operating permit for failure to comply with an MCL.

Id. § 116625(a). Action Levels (known as “Notification

Levels” after 2004) are non-regulatory advisory levels for

contaminants. Id. § 116455(c)(3). The only action required

when a contaminant exceeds an Action Level, but remains

below an MCL or when no MCL has been set, is notification

to CDPH. Id. § 116455(a)(2).

In 1999, the CDPH set the perchlorate Action Level at 18

ppb. At this time, consistent with its responsibility under

California law, Pomona began monitoring perchlorate levels

in its groundwater and reporting these levels to the CDPH. In

2002, the CDPH reduced the perchlorate Action Level to four

ppb. Pomona continued to monitor perchlorate levels. In

2007, CDPH established a perchlorate MCL of six ppb. In

response to the MCL, Pomona immediately took steps

towards compliance, including shutting off wells, purchasing

water from other sources, and blending well water with nonwell water to reduce the levels of perchlorate. Pomona also

began shifting its existing nitrate removal processes to

perchlorate removal and hired an engineer to identify a longterm solution for compliance with the MCL.

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6 CITY OF POMONA V. SQM

On October 15, 2010, Pomona filed this lawsuit against

SQM North America Corporation (“SQMNA”) to recover the

cost of investigating and remediating perchlorate

contamination in the groundwater in and around Pomona,

California. Pomona alleges that SQMNA’s importation of

natural sodium nitrate from the Atacama Desert in Chile for

use as a fertilizer was the primary source of Pomona’s

perchlorate contamination.

On October 31, 2011, SQMNA moved for summary

judgment on two grounds. First, SQMNA argued that

Pomona had not suffered a compensable injury under strict

products liability law based on California’s “economic loss

rule.” Second, SQMNA argued that even if Pomona had

suffered a compensable injury, Pomona’s claim was barred

by the applicable three-year statute of limitations. The district

court denied SQMNA summaryjudgment on both arguments.

The case then proceeded toward trial.

On January 6, 2012, the district court held a Daubert

hearing to consider SQMNA’s pretrial motion in limine to

exclude the testimony of Dr. Neil Sturchio, Pomona’s expert

witness on causation. Dr. Sturchio is the director of the

Environmental Isotope Geochemistry Laboratory at the

University of Illinois at Chicago. Dr. Sturchio began working

on Pomona’s perchlorate case in April 2011, using a

methodology known as “stable isotope analysis.”1

1 An atom is a basic unit of matter that consists of a central or core

nucleus surrounded by a cloud of negatively charged electrons. Inside the

nucleus are positively charged protons and, typically, electrically neutral

neutrons. An isotope is a form of a chemical element that has the same

number of protons in the nucleus (i.e., the same atomic number) as that

element but a different number of neutrons in the nucleus (i.e., a different

atomic weight). Isotopes that are not subject to nuclear decay are known

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CITY OF POMONA V. SQM 7

Acting under the direction of Dr. Sturchio, Wildermuth

Environmental, Inc. (“Wildermuth”) collected well water

samples from Pomona using methods based on the Guidance

Manual for Forensic Analysis of Perchlorate in Groundwater

using Chlorine and Oxygen Isotopic Analyses (“Guidance

Manual”). Wildermuth shipped those samples to Dr. Sturchio

with blind labels. Dr. Sturchio analyzed the isotopic

composition of the perchlorate in Pomona’s groundwater

using stable isotope analysis and compared the resulting

information with a reference database of known perchlorate

sources.

Dr. Sturchio used a four-step methodology with multiple

sub-parts. Dr. Sturchio disclosed this methodology in his

expert report filed in this litigation. It was also published in

2011 in the Guidance Manual, which was commissioned by

the Environmental Security Technology Certification

Program (“ESTCP”) of the United States Department of

Defense. The four steps described in the Guidance Manual

are: (1) collection of groundwater samples; (2) extraction and

purification; (3) oxygen and chlorine isotopic analyses on the

purified samples; and (4) determination of probable sources

by comparing the resulting isotope data to a reference

database. Before the publication of the Guidance Manual,

peer-reviewed articles provided abbreviated descriptions of

the fundamental methods used for stable isotope analysis by

Dr. Sturchio and his colleagues.

as “stable isotopes,” whereas isotopes that are subject to nuclear decay are

known as “radioactive isotopes.” Isotope analysis is the study of the

nucleus of an atom. Stable isotope analysis is based on the proposition that

stable isotopes of a given chemical element (e.g., perchlorate) can have

distinct isotopic compositions that may indicate the origin or source of a

molecule containing that element.

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8 CITY OF POMONA V. SQM

Based on this analysis, Dr. Sturchio opined that the

dominant source of perchlorate in the Pomona groundwater

is from the Atacama Desert in Chile and that the samples also

contained minor amounts of perchlorate from other

non-Atacama sources, including synthetic or indigenous

natural sources. Based largely upon Dr. Sturchio’s findings,

Pomona argued that the perchlorate found in its groundwater

had the same distinctive isotopic composition as the

perchlorate imported into southern California from Chile by

SQMNA between 1927 and the 1950s.

SQMNA moved to exclude Dr. Sturchio’s opinions,

arguing that “stable isotope analysis” failed to satisfy

Daubert and was insufficiently reliable to be received in

evidence under Rule 702 of the Federal Rules of Evidence.

After an evidentiary hearing, the district court granted

SQMNA’s motion in limine to exclude Dr. Sturchio’s

testimony.The district court excluded Dr. Sturchio’s opinions

as unreliable on the grounds that: (1) the opinions were

subject to future methodological revisions and not yet

certified; (2) the procedures he used had not yet been tested

and were not subject to retesting; and (3) the reference

database used by Dr. Sturchio was too small. Shortly

thereafter, Pomona and SQMNA stipulated to a conditional

dismissal with prejudice in order to facilitate review of the

district court’s order excluding Dr. Sturchio’s testimony,

among other rulings.2

2 Pomona also argued that the district court abused its discretion by

failing expressly to apply the factors considered in Daubert v. Merrell

Dow Pharmaceuticals, Inc., 43 F.3d 1311 (9th Cir. 1995) (“Daubert II”).

“[W]hether Daubert’s specific factors are, or are not, reasonable measures

of reliability in a particular case is a matter that the law grants the trial

judge broad latitude to determine.” Kumho Tire Co., Ltd. v. Carmichael,

526 U.S. 137, 153 (1999). The district court cited Daubert as the

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CITY OF POMONA V. SQM 9

STANDARDS OF REVIEW

We review evidentiary rulings for abuse of discretion and

reverse if the exercise of discretion is both erroneous and

prejudicial. Nevada Dept. of Corr. v. Greene, 648 F.3d 1014,

1018 (9th Cir. 2011) (citation omitted). We review underlying

factual determinations for clear error. United States v.

Lukashov, 694 F.3d 1107, 1114 (9th Cir. 2012). We review a

district court’s order granting or denying summary judgment

de novo. Ford v. City of Yakima, 706 F.3d 1188, 1192 (9th

Cir. 2013).

DISCUSSION

A. Exclusion of Pomona’s Expert Witness Dr.

Sturchio

1. Legal Standards

Rule 702 of the Federal Rules of Evidence provides that

expert opinion evidence is admissible if: (1) the witness is

sufficiently qualified as an expert by knowledge, skill,

experience, training, or education; (2) the scientific, technical,

or other specialized knowledge will help the trier of fact to

understand the evidence or to determine a fact in issue;

(3) the testimony is based on sufficient facts or data; (4) the

testimony is the product of reliable principles and methods;

and (5) the expert has reliably applied the relevant principles

and methods to the facts of the case. Fed. R. Evid. 702.

controlling rule of law in evaluating SQMNA’s motion to exclude Dr.

Sturchio’s testimony. The district court did not abuse its discretion by not

explicitly reciting the factors analyzed in Daubert II. See United States v.

Preston, 706 F.3d 1106, 1118 (9th Cir. 2013).

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10 CITY OF POMONA V. SQM

Under Daubert and its progeny, including Daubert II, a

district court’s inquiry into admissibility is a flexible one.

Alaska Rent-A-Car, Inc. v. Avis Budget Grp., Inc., 738 F.3d

960, 969 (9th Cir. 2013). In evaluating proffered expert

testimony, the trial court is “a gatekeeper, not a fact finder.”

Primiano v. Cook, 598 F.3d 558, 565 (9th Cir. 2010) (citation

and quotation marks omitted).

“[T]he trial court must assure that the expert testimony

‘both rests on a reliable foundation and is relevant to the task

at hand.’” Id. at 564 (quoting Daubert, 509 U.S. at 597).

“Expert opinion testimony is relevant if the knowledge

underlying it has a valid connection to the pertinent inquiry.

And it is reliable if the knowledge underlying it has a reliable

basis in the knowledge and experience of the relevant

discipline.” Id. at 565 (citation and internal quotation marks

omitted). “Shaky but admissible evidence is to be attacked by

cross examination, contrary evidence, and attention to the

burden of proof, not exclusion.” Id. at 564 (citation omitted).

The judge is “supposed to screen the jury from unreliable

nonsense opinions, but not exclude opinions merely because

they are impeachable.” Alaska Rent-A-Car, 738 F.3d at 969.

Simply put, “[t]he district court is not tasked with deciding

whether the expert is right or wrong, just whether his

testimony has substance such that it would be helpful to a

jury.” Id. at 969–70.

The test of reliability is flexible. Estate of Barabin v.

AstenJohnson, Inc., 740 F.3d 457, 463 (9th Cir. 2014) (en

banc). The court must assess the expert’s reasoning or

methodology, using as appropriate criteria such as testability,

publication in peer-reviewed literature, known or potential

error rate, and general acceptance. Id.; see also Primiano, 598

F.3d at 564. But these factors are “meant to be helpful, not

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CITY OF POMONA V. SQM 11

definitive, and the trial court has discretion to decide how to

test an expert’s reliability as well as whether the testimony is

reliable, based on the particular circumstances of the

particular case.” Primiano, 598 F.3d at 564 (citations and

quotation marks omitted); see also Barabin, 740 F.3d at 463.

The test “is not the correctness of the expert’s conclusions but

the soundness of his methodology,” and when an expert

meets the threshold established by Rule 702, the expert may

testify and the fact finder decides how much weight to give

that testimony. Primiano, 598 F.3d at 564–65. Challenges

that go to the weight of the evidence are within the province

of a fact finder, not a trial court judge. A district court should

not make credibility determinations that are reserved for the

jury.

2. Methodology and certification

The district court concluded that Dr. Sturchio’s

procedures are not reliable because they are not generally

accepted in the scientific community. The court gave two

reasons: (1) the Quality Assurance/Quality Control

(“QA/QC”) parameters were still being refined; and (2) the

Environmental Protection Agency (“EPA”) has not yet

certified stable isotope analysis for organic or inorganic

compounds. These reasons are insufficient to exclude Dr.

Sturchio’s testimony.

First, scientific methods that are subject to “further testing

and refinement” may be generally accepted and sufficiently

reliable. There are “no certainties in science.” Daubert, 509

U.S. at 590. For scientific evidence to be admissible, the

proponent must show the assertion is “derived by [a]

scientific method.” Id.Opinion based on “unsubstantiated and

undocumented information is the antithesis of . . .

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12 CITY OF POMONA V. SQM

scientifically reliable expert opinion.” Cabrera v. Cordis

Corp., 134 F.3d 1418, 1423 (9th Cir. 1998). The existence of

ongoing research, however, does not necessarily invalidate

the reliability of expert testimony. See Metabolife Int’l, Inc.

v. Wornick, 264 F.3d 832, 843 (9th Cir. 2001) (holding that

it was “plain error to hold that the Columbia study was not

finished—while the overall project was ongoing, all of the

relevant data had been gathered in final form, and Metabolife

presented an expert interpretation of that data”). For example,

during the “raging controversy” surrounding the new

technique of DNA testing, the Ninth Circuit rejected the

argument that “the FBI’s DNA testing and statistical

procedures may warrant review and revision” as an adequate

reason to exclude expert testimony. United States v.

Chischilly, 30 F.3d 1144, 1152–53 (9th Cir. 1994).

The controlling standards published in the Guidance

Manual are subject to further evolution. A “disagreement

over, not an absence of, controlling standards” is not a basis

to exclude expert testimony. Chischilly, 30 F.3d at 1154. The

methods described in the Guidance Manual are the product

of 12 peer-reviewed publications on stable isotope analysis of

perchlorate. The Guidance Manual is a product of interlaboratory collaboration that began before the initiation of

this litigation. Further, all the methods that Dr. Sturchio used

were fully disclosed in his expert report from October 2011.

There is no record evidence that Dr. Sturchio’s opinion is the

product of a hasty, incomplete effort.3

3 SQMNA argues that Dr. Sturchio’s analysis is incomplete and was

previously excluded by another court. In 2003, the Northern District of

Illinois excluded the expert testimony of Dr. Sturchio in a matter that, at

best, is tangentially related to the analysis he completed for Pomona.

Mejdrech v. Lockformer Co., No. 01 C 6107, 2003 WL 22078388, at *1

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CITY OF POMONA V. SQM 13

Second, the district court noted that because “there are no

USEPA-certified methods for CSIA of organic or inorganic

compounds,” Dr. Sturchio’s methods were not reliable.

Pomona, however, may satisfy its burden of establishing that

the evidence is scientifically valid by “pointing to some

objective source to show that the conclusions are based on

‘scientific method, as it is practiced by (at least) a recognized

minority of scientists in the[] field.’” Southland Sod Farms v.

Stover Seed Co., 108 F.3d 1134, 1141 (9th Cir. 1997)

(quoting Daubert II, 43 F.3d at 1318–19 (alteration in

original)). Thus, EPA certification of the isotopic analysis of

perchlorate is not a precondition to admissibility.

Dr. Sturchio and two other laboratories compiled the

Guidance Manual, which shows that the methods Dr.

Sturchio employed were reviewed by other laboratories and

subject to inter-laboratory calibration. In particular, Dr.

Sturchio has collaborated on the methodology used in this

case with Dr. J.K. Böhlke, who is among the world’s leading

authorities on the measuring and reporting of isotope ratios.

(N.D. Ill., Sept. 5, 2003). Although both Mejdrech and this case involve

the science of stable isotope analysis, they are factually distinct. In

Mejdrech, Dr. Sturchio testified about chlorine isotope ratios between

volatile organic compounds taken from the plaintiff’s locations and the

trichloroethylene (TCE) found on the defendant’s property. Id. at *1. The

district court found Dr. Sturchio’s opinion to be unreliable due to a risk of

sample contamination because he departed from peer-reviewed

methodologies, because the chlorine isotopes that Dr. Sturchio purported

to measure could not be measured on a compound-specific basis (such that

he could identify or source specific TCE), and based on the allegation that

Dr. Sturchio had failed to address unfavorable results in his expert report.

Id. at *2–3. Dr. Sturchio is using different methodologies in this case, and

SQMNA raises unique challenges that are not analogous to the facts of

Mejdrech. Thus, the Mejdrech decision has little or no bearing on the

analysis here.

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14 CITY OF POMONA V. SQM

This demonstrates that Dr. Sturchio’s method is “practiced by

(at least) a recognized minority of scientists in the[] field.” Id.

at 1141. SQMNA attempts to discredit Dr. Sturchio’s

perchlorate techniques by quoting from an EPA manual on

the stable isotope analysis of organic compounds at hazardous

waste sites. The statements in the EPA manual relating to

hazardous waste sites do not relate to the methodologies

employed by Dr. Sturchio to analyze Pomona’s groundwater.

EPA’s warning regarding the application of isotope analysis

to new, untested areas is a valid basis to require additional

indicia of reliability for those new areas of application. See

Att’y Gen. of Okla. v. Tyson Foods Inc., 565 F.3d 769,

780–81 (10th Cir. 2009) (rejecting a new application of PCR

method DNA typing where there was no testing or peerreviewed publications specific to the application). In this

case, however, the stable isotope study of chlorine and

oxygen in perchlorate found in groundwater has been tested,

analyzed, and subjected to peer review for at least ten years. 

Thus, despite the fact that there is no EPA-certified

method of analysis, the record shows that Dr. Sturchio’s

methodology and report are based on the scientific method,

practiced by recognized scientists in the field, and have a

basis in the knowledge and experience of the relevant

discipline, thereby rendering the report reliable. See

Southland Sod Farms, 108 F.3d at 1141. Dr. Sturchio’s expert

report details how he analyzed the relevant data and applied

the data to reach his conclusions. The Federal Rules of

Evidence do not require an endorsement from the EPA

approving Dr. Sturchio’s results. The district court’s

conclusion to the contrary was an abuse of discretion. See

Preston, 706 F.3d at 1118.

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CITY OF POMONA V. SQM 15

3. Testing and retesting

The district court also excluded Dr. Sturchio’s testimony

because his methods “have not been tested by other

laboratories and are not subject to retesting given the failure

to take dual samples.” In order for a scientific technique to be

reliable, there must be evidence in the record indicating the

methodology “can be or has been tested.” Cooper v. Brown,

510 F.3d 870, 880–81 (9th Cir. 2007). The question is

whether an expert’s methodology can be “challenged in some

objective sense, or whether it is instead simply a subjective,

conclusory approach that cannot reasonably be assessed for

reliability.” Fed. R. Evid. 702 AdvisoryCommittee’s Note to

2000 Amendments. Daubert described the “testability” prong

in the context of a hypothesis that is falsifiable. 509 U.S. at

593. Testability “assures the opponent of proffered evidence

the possibility of meaningful cross-examination (should he or

someone else undertake the testing).” United States v.

Mitchell, 365 F.3d 215, 238 (3d Cir. 2004). The district court

incorrectly applied this standard.

The district court’s conclusion was erroneous for three

reasons: (1) other laboratories have tested the methodologies

from the Guidance Manual used by Dr. Sturchio; (2) Dr.

Sturchio’s procedures are subject to retesting by another

laboratory; and (3) challenges to the results obtained by using

the techniques from the Guidance Manual go to the weight of

the evidence and are a question for the fact finder, not the

trial court.

First, Dr. Sturchio’s methods were fully disclosed in the

Guidance Manual and are the same methods that Dr. Sturchio

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16 CITY OF POMONA V. SQM

used in his analysis of Pomona’s groundwater.4 The Guidance

Manualrepresents the latest compilation of QA/QC processes

for any laboratory engaged in stable isotope analysis of

perchlorate. The test under Daubert is whether the method

“can be or has been tested.” Cooper, 510 F.3d at 880 (citation

omitted). In Cooper, for example, the court excluded expert

testimony because there was “no evidence in the record that

application of mass spectrometryto forensic analysis of blood

evidence to determine EDTA levels can be or has been

tested.” Id. Unlike in Cooper, here several laboratories have

used and tested the methodologies described in the Guidance

Manual, including the U.S. Geological Survey, the Oak Ridge

National Laboratory, and the University of Illinois at Chicago

where Dr. Sturchio works. Although Dr. Sturchio operates the

only commercial laboratory using this methodology, testing

at governmental laboratories demonstrates that Dr. Sturchio’s

methods can be objectively challenged.

Second, Dr. Sturchio’s processes are subject to retesting.

Under Daubert’s testability factor, the primary requirement

is that “[s]omeone else using the same data and methods . . .

be able to replicate the result[s].” Zenith Elecs. Corp. v. WHTV Broad. Corp., 395 F.3d 416, 419 (7th Cir. 2005). The

district court stated that the “failure to take dual samples”

meant that Dr. Sturchio’s “methods” could not be retested.

SQMNA argues that the district court did not err because

there were two relevant defects in Dr. Sturchio’s sampling

procedures: (1) Dr. Sturchio failed to use duplicate columns

4 SQMNA contends that Dr. Sturchio’s methods are not fully disclosed.

Dr. Sturchio, however, provided a detailed description of the Pomona

analysis in his expert report, which correlates with the processes described

in the Guidance Manual.

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CITY OF POMONA V. SQM 17

in collecting groundwater samples; and (2) Dr. Sturchio failed

to take split samples in order to compare analytical results.

SQMNA’s defense of the district court’s ruling is

unpersuasive because both grounds for exclusion are without

adequate support in the record. Neither of the alleged

“defects” are “required” analytical steps for stable isotope

analysis and, hence, neither are necessary for retesting to

occur. The use of duplicate columns during sampling is not

mandatory. The basic diagram of the technique employed by

Dr. Sturchio shows that the duplicate ion exchange column is

“optional.” The Guidance Manual also explains that “[i]n

many instances, single IX columns are collected from each

well.” Duplicate columns are recommended for use on wells

that have low levels of perchlorate, not for all sampling. In

addition, the sample splitting mentioned in the Guidance

Manual also is not mandatory. Dr. Sturchio contends that he

ran duplicate analyses of his samples, verifying the Pomona

results. Dr. Sturchio’s Pomona results were also consistent

with the pre-litigation Chino Basin Watermaster study.

SQMNA correctly notes that Dr. Sturchio failed

independently to verify his test results with a separate lab.

This point, however, may serve to undermine or impeach the

weight that should be afforded to Dr. Sturchio’s testimony,

but it does not refute the scientific reliability of his analysis.

Third, it is a question for the jury, not the court, to

determine what weight to afford Dr. Sturchio’s testimony.

SQMNA argues that Pomona did not follow the Guidance

Manual protocols and that Pomona’s collection and

extraction procedures were “makeshift.” Daubert, however,

“does not forbid admission” of a report where the weight of

the conclusions are subject to challenge. United States v.

Brannon, 146 F.3d 1194, 1196 (9th Cir. 1998) (permitting the

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18 CITY OF POMONA V. SQM

admission of breathalyzer evidence where the scientific

technique was not challenged, but rather, the results

obtained).

SQMNA’s argument relates to adherence to protocol,

which typically is an issue for the jury. See Chischilly, 30

F.3d at 1154. SQMNA urges the Court to take a guarded

approach to the issue of an expert’s adherence to protocol.

See, e.g., In re Paoli R.R. Yard PCB Litig., 35 F.3d 717, 745

(3d Cir. 1994) (holding that “any step that renders the

analysis unreliable . . . renders the expert’s testimony

inadmissible. This is true whether the step completely

changes a reliable methodology or merely misapplies that

methodology.”). In the Ninth Circuit, however, expert

evidence is inadmissible where the analysis “is the result of

a faulty methodology or theory as opposed to imperfect

execution of laboratory techniques whose theoretical

foundation is sufficiently accepted in the scientific

community to pass muster under Daubert.” Chischilly, 30

F.3d at 1154 & n.11 (citations omitted). The rationale of this

approach is that “[a] minor flaw in an expert’s reasoning or

a slight modification of an otherwise reliable method” does

not render expert testimony inadmissible. Amorgianos v.

Nat’l R.R. Passenger Corp., 303 F.3d 256, 267 (2d Cir.

2002). A more measured approach to an expert’s adherence

to methodological protocol is consistent with the spirit of

Daubert and the Federal Rules of Evidence: there is a strong

emphasis on the role of the fact finder in assessing and

weighing the evidence. Daubert, 509 U.S. at 594–95.

The district court did not provide an explanation as to

why Dr. Sturchio’s alleged failure to adhere to the protocols

in the Guidance Manual were significant enough to render his

entire analysis unreliable. SQMNA argued to the district

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CITY OF POMONA V. SQM 19

court that there was insufficient documentation of the

sampling and extraction procedures. Dr. Sturchio’s testimony,

however, belies this conclusion. He explained that he had

documentation verifying that the sampling procedures were

followed pursuant to the Guidance Manual. He also verified

in his expert report and during the Daubert hearing that he

followed the very detailed standard operating procedure for

every sample that was analyzed. The district court did not

apply the correct rule of law: only a faulty methodology or

theory, as opposed to imperfect execution of laboratory

techniques, is a valid basis to exclude expert testimony.

Chischilly, 30 F.3d at 1154. Ignoring a controlling rule of law

constitutes an abuse of discretion. See Preston, 706 F.3d at

1118. Moreover, given that Dr. Sturchio refuted SQMNA’s

assertion that the Guidance Manual protocols were not

followed, the district court’s application of the Chischilly

standard is “without . . . inferences that may be drawn from

the facts in the record.” See id.

SQMNA’s arguments challenging Dr. Sturchio’s expert

testimony are not uncontroverted, and they go to the weight

that a fact finder should give to his expert report. The district

court erroneously ruled that Dr. Sturchio’s methodologies

have not been and cannot be tested.

4. Reference database

The district court ruled that Dr. Sturchio’s “reference

database is too limited in order for him to reliably comment

on the exclusiveness of the location of the potential source of

perchlorate in Pomona’s water with an acceptable rate of

error.” The district court, however, was presented with

conflicting expert evidence. SQMNA’s expert Dr. Ramon

Aravena (“Dr. Aravena”) contended that the perchlorate

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20 CITY OF POMONA V. SQM

reference database was too small. Dr. Sturchio, on the other

hand, explained that the database was sufficiently large to

permit him reasonably to draw a connection to the Atacama

perchlorate.

At the Daubert hearing, the trial court was presented with

Dr. Sturchio’s analysis that the “dominant source of

perchlorate in the Pomona groundwater is from Atacama

(Chile)” and that the samples contained “minor amounts of

perchlorate from other non-Atacama sources including

synthetic and/or indigenous natural sources.” Dr. Aravena’s

expert report cautioned that “not all the potential perchlorate

sources have been characterized.” Dr. Sturchio, however,

responded to Dr. Aravena’s contention by arguing that Dr.

Aravena’s opinion was based on disclosures and quotations

from old and outdated publications. Dr. Sturchio also

explained that when the Pomona study was conducted,

synthetic and Atacama sources of perchlorate were well

known and well characterized. At most, this battle among

experts merely shows that Dr. Sturchio may not know the

isotopic composition of every source of perchlorate in the

world with a certainty. Under Daubert, however, such a

“certainty” is not required, thus making this an invalid basis

to exclude expert testimony. 509 U.S. at 590.

The Supreme Court has stated that “[t]rained experts

commonly extrapolate from existing data.” General Elec. Co.

v. Joiner, 522 U.S. 136, 146 (2007). It is where expert

opinion is “connected to existing data only by the ipse dixit

of the expert” that there may be “too great an analytical gap

between the data and the opinion preferred” to support

inclusion of the testimony. Id. Joiner requires an expert to

justify a foundational assumption or refute contrary record

evidence.

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CITY OF POMONA V. SQM 21

Chischilly is illuminating on this point. In that case, the

defendant challenged the use of the FBI’s ethnic-specific

database for Native Americans (the “I-3 database”). 30 F.3d

at 1155. The court considered whether the FBI’s I-3 database

was too small and may have contained too few Navajos to be

reliable. Id. Both sides of the debate could find “support in

the journals and research, and both sides [had] prominent

spokespeople.” Id. Under Daubert’s liberal standard, this sort

of debate functioned more as an adverse admission and

proved deadlock on both sides of an issue. Id. at 1555–56.

The Chischilly court found that this evidence disproved a lack

of “general acceptance” in the scientific community. Id.

The Chischilly analysis also demonstrates how trial courts

ought to treat conflicting expert testimony. A factual dispute

is best settled by a battle of the experts before the fact finder,

not by judicial fiat. Where two credible experts disagree, it is

the job of the fact finder, not the trial court, to determine

which source is more credible and reliable. United States v.

Sandoval-Mendoza, 472 F.3d 645, 654 (9th Cir. 2006).

The district court’s resolution of this debate was an abuse

of discretion and sufficient grounds for reversal. See Preston,

706 F.3d at 1118. Under Rule 702, it is reasonable for the

jury to be presented with conflicting expert testimony.

Sandoval-Mendoza, 472 F.3d at 654. Even if Dr. Sturchio’s

conclusions were “shaky,” they should be attacked by “cross

examination, contrary evidence, and attention to the burden

of proof, not exclusion.” Primiano, 598 F.3d at 564. The

district court abused its discretion in concluding that the

reference database was too small. This is a matter for the jury.

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22 CITY OF POMONA V. SQM

B. Denial of SQMNA’s Motion for Summary

Judgment

1. Legal Standards

A party is entitled to summary judgment if the “movant

shows that there is no genuine dispute as to any material fact

and the movant is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(a). The moving party has the burden of

establishing the absence of a genuine dispute of material fact.

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court

must view the evidence in the light most favorable to the nonmovant and draw all reasonable inferences in the nonmovant’s favor. Clicks Billiards Inc. v. Sixshooters Inc., 251

F.3d 1252, 1257 (9th Cir. 2001). Although “[c]redibility

determinations, the weighing of the evidence, and the

drawing of legitimate inferences from the facts are jury

functions, not those of a judge . . . ruling on a motion for

summary judgment,” the “mere existence of a scintilla of

evidence in support of the plaintiff’s position [is]

insufficient. . . . ” Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 252, 255 (1986). “Where the record taken as a whole

could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.” Matsushita

Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574,

587 (1986) (citation and quotation marks omitted).

The substantive law governing both the economic loss

rule and the statute of limitations in this case is California

law. See Neely v. St. Paul Fire & Marine Ins. Co., 584 F.2d

341, 345 (9th Cir. 1978). Whether evidence on a particular

issue is sufficient to raise a question of fact for the jury, on

the other hand, is governed by federal law. Id.

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CITY OF POMONA V. SQM 23

2. Economic loss rule

SQMNA argues that the damages sought by Pomona are

barred by the economic loss rule. Under California law,

“economic loss” consists of damages for inadequate value,

cost of repair, cost of replacement of defective products, and

lost profit. Robinson Helicopter Co., Inc. v. Dana Corp., 102

P.3d 268, 273 (Cal. 2004). California’s economic loss rule

provides that the recovery of economic loss under strict

products liability is appropriate only when there has been

physical harm to persons or property other than the allegedly

defective product itself. Id.

Pomona is not seeking to recover economic loss for an

allegedly defective product. Instead, Pomona claims that the

allegedly defective product and the damaged property are

distinct. The allegedlydefective product at issue is SQMNA’s

fertilizer, and the damaged or physically harmed property is

Pomona’s groundwater. Because Pomona has presented a

genuine dispute of material fact regarding property damage

to the affected groundwater, the economic loss rule does not

bar the recovery of economic damages.

SQMNA relies on two cases for its argument that

Pomona’s claims are barred by the economic loss rule. These

cases are distinguishable from the facts here. First, SQMNA

cites County of Santa Clara v. Atlantic Richfield Company for

the holding that costs incurred for “abatement, removal,

replacement and/or remediation” of lead paint were nonrecoverable economic loss. 40 Cal. Rptr. 3d 313, 335–37

(Cal. Ct. App. 2006). In Santa Clara, however, the plaintiff

made no allegations that the defective lead paint had caused

any damage to persons or property outside the defective

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24 CITY OF POMONA V. SQM

product itself. Id. at 337 n.10. In this case, Pomona asserts

damage to property independent of the fertilizer.

The second case SQMNA cites is California Department

of Toxic Substances Control v. Payless Cleaners, No. CIV02-

2389 LKK/DAD, 2007 WL 2580626 (E.D. Cal. Aug. 17,

2007) (“Payless”). SQMNA cites Payless for the proposition

that “the cost of removing hazardous substances and their

remediation are economic costs—not physical injuries to

property.” Id. at *6. The plaintiffs in Payless, a dry-cleaning

business and the original defendants in the action, had

improperly disposed of dry cleaning solvent, which leaked

into the ground and water supply. Id. at *1. Filing a thirdparty complaint, the plaintiffs sued the manufacturers of the

dry-cleaning solvent, claiming strict liability and negligence

and seeking indemnity and contribution. Id. The court

dismissed the plaintiffs’ strict liability and negligence claims,

finding that they “failed to plead the existence of damage to

any physical component of their land, and they have not

shown that theycould allege that [the contaminant] physically

injured their property.” Id. at *6. These facts make the case

distinguishable from the Pomona lawsuit because unlike the

plaintiffs in Payless, Pomona alleges damage to its

groundwater supply in which it has a property interest. In

addition, it appears that the Payless court’s application of the

economic loss rule is contrary to established California law.

The court in Payless appears to disregard the fact that there

were allegations of damage to property “other than” the

defective product itself. See Robinson Helicopter, 102 P.3d

at 273.

SQMNA also argues that Pomona is barred from recovery

under the economic loss rule because Pomona does not own

the water supply at issue and, therefore, is not the proper

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CITY OF POMONA V. SQM 25

party to bring the action. Although California Water Code

§ 102 directs that all water within the state of California is the

property of the people of California, Pomona maintains a

usufructuary right to the water located in its wells. See Cal.

Water Code § 102. California and federal courts alike have

held that pollution of groundwater is damage to property and

that usufructuary rights confer sufficient standing to claim

damages caused by pollution. See, e.g., Tulare Lake Basin

Water Storage Dist. v. United States, 49 Fed. Cl. 313, 319

(Fed. Cl. 2001) (relying on California law); Aerojet-Gen.

Corp. v. Superior Court of San Mateo Cnty., 209 Cal. App. 3d

973, 229–30 (Cal. Ct. App. 1989), abrogated on other

grounds by AIU Ins. Co. v. Superior Court, 799 P.2d 1253

(Cal. 1990).

Reviewing this portion of the district court’s opinion de

novo, SQMNA has failed to show that there is no genuine

factual dispute as to whether Pomona’s claims are barred by

the economic loss rule. Pomona provided evidence regarding

its possessory interest in the groundwater and damage to its

groundwater that is sufficient to survive summary judgment.

The district court’s analysis is correct.

3. Statute of limitations

Under California law, the statute of limitations for injury

to real property is three years. Cal. Civ. Proc. Code § 338(b).

The limitations period for tort actions commence with the

occurrence of the last element essential to the cause of action.

San Francisco Unified Sch. Dist. v. W.R. Grace & Co., 37

Cal. App. 4th 1318, 1326 (Cal. Ct. App. 1995). When the last

element to occur is damage, the limitations period starts upon

the occurrence of “appreciable and actual harm, however

uncertain in amount, that consists of more than nominal

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26 CITY OF POMONA V. SQM

damages.” Id. (citation and quotation marks omitted).

Although the speculative or uncertain nature of the damages

will not toll the period of limitations, the “mere breach of

duty—causing only nominal damages, speculative harm or

the threat of future harm not yet realized—normally does not

suffice to create a cause of action.” Id.

The test for when appreciable harm has occurred in water

contamination cases has not been well defined in the

California courts. In a relatively recent water contamination

case, a federal district court applying California law found

that appreciable harm occurs when the contamination “caused

or should have caused” the party to act in response to the

contamination. In re MTBE Prods. Liab. Litig., 475 F. Supp.

2d 286, 293–95 (S.D.N.Y. 2006). In In re MTBE, a

consolidated multi-district litigation case, the plaintiffssought

relief from contamination of groundwater from the

defendants’ use of methyl tertiary butyl ether (“MTBE”), a

gasoline additive. Id. at 287. Because the plaintiffs had been

testing for MTBE for many years, the defendants argued that

their claims were time barred.

The court in MTBE held that when “the MTBE detected

in the groundwater was such that [the plaintiffs] took, or

should have taken, steps to investigate, clean up, abate, and/or

remediate the alleged contamination,” the appreciable harm

had occurred. Id. at 295 (quotation marks omitted). The court

noted that the inquiry regarding when a party “should” have

acted in response to contamination is a very fact intensive

inquiry that is not easily decided on summary judgment. Id.

Notably, the court also found that the city’s actions in testing

the water for MTBE levels and reporting those levels to the

state did not, by themselves, establish appreciable harm. Id.

at 292–94.

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CITY OF POMONA V. SQM 27

Pomona contends that the statute of limitations

commenced when the state issued an MCL for perchlorate in

2007. SQMNA argues that Pomona’s actions in testing for

perchlorate and reporting perchlorate levels to CDPH in the

years before 2007 establish appreciable harm and trigger the

statute of limitations. In support of its argument, SQMNA

identifies a 2001 water permit contract with CDPH that

requires that “[a]ll water produced by the City shall meet all

Maximum Contaminant Levels (MCLs) and all ActionLevels

established by [CDPH].” Although there was no existing

MCL for perchlorate in 2001, a perchlorate Action Level was

in place. Moreover, before 2007, some of the wells at issue in

this litigation had perchlorate levels above the established

Action Level.

Action Levels, unlike MCLs, however, do not legally

require Pomona to take action to reduce contaminants in the

water. In fact, before the adoption of the perchlorate MCL in

2007, the perchlorate suggested “response level” was set at 40

ppb, a number significantly higher than the perchlorate levels

in any of the Pomona wells. Therefore, despite the seemingly

inflexible text in Pomona’s water permit contract, Pomona’s

only “required” actions in response to perchlorate

contamination before 2007 consisted of testing and reporting.

The In re MTBE court found that testing and reporting

requirements, standing alone, do not constitute appreciable

harm under California law. 475 F. Supp. 2d at 292–94. The

court’s finding is persuasive, particularly considering that

municipalities across California are required to test and report

on hundreds of unregulated chemicals.

SQMNA also argues that Pomona either acted or should

have acted to reduce the perchlorate level in the water supply

before 2007, which also triggered the running of the statute

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28 CITY OF POMONA V. SQM

of limitations. This claim is predicated on disputed facts.

Although SQMNA argues that Pomona actively treated

groundwater to reduce perchlorate before 2007, Pomona

presents testimony from employees who note that before the

perchlorate MCL in 2007, there was no program to remove

perchlorate from the water and that any removal that did

occur was “ancillary” to Pomona’s active nitrate treatment

program.

SQMNA also argues that Pomona knew about the

perchlorate contamination and therefore should have acted to

reduce the perchlorate levels; however, Pomona has provided

evidence that its failure to act was reasonable at the time,

given the scientific uncertainty regarding the safety of

perchlorate in drinking water and the fact that Pomona relied

on MCLs as “guideposts” for determining what levels of

contamination were safe.5

Other than Pomona’s testing and reporting, all of

SQMNA’s assertions regarding Pomona’s pre-2007 actions

in response to perchlorate contamination are based on

disputed facts. As such, determining when appreciable harm

 

5

 SQMNA also argues that Pomona should be bound by its initial Rule

26 damages disclosures, which assert damages for perchlorate related

expenses before the adoption of the MCL. This argument is without merit.

Pomona’s amended Rule 26 disclosures eliminate the pre-October 2007

claim for damages. Although Ninth Circuit authority provides that initial

disclosures that have been later amended are admissible in evidence,

SQMNA cites no authority for the proposition that an original disclosure,

before being amended, is a “binding” admission. SQMNA implies that the

“sham affidavit” rule, see Nelson v. City of Davis, 571 F.3d 924, 927–28

(9th Cir. 2009), might apply in this context by analogy. There is, however,

no evidence that Pomona’s amended discovery disclosures and

calculations are a “sham.” Thus, SQMNA’s implied argument is

unavailing.

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CITY OF POMONA V. SQM 29

may have occurred is inappropriate for resolution on

summary judgment. Viewing the evidence in the light most

favorable to Pomona, SQMNA cannot demonstrate as a

matter of law that Pomona’s claim is barred by the three-year

statute of limitations. Therefore, the district court did not err

in denying summary judgment to SQMNA on its statute of

limitations defense.

CONCLUSION

Expert testimony may be excluded by a trial court under

Rule 702 of the Federal Rules of Evidence only when it is

either irrelevant or unreliable. Facts casting doubt on the

credibility of an expert witness and contested facts regarding

the strength of a particular scientific method are questions

reserved for the fact finder. Accordingly, we reverse the

district court’s exclusion of Dr. Sturchio’s expert testimony.

In addition, viewing the evidence in the light most favorable

to the non-moving party, SQMNA has failed to show that

there is no genuine factual dispute as to whether Pomona’s

claims are barred by the economic loss rule or by the

applicable statute of limitations. Therefore, we affirm the

district court’s denial of SQMNA’s motion for summary

judgment. 

AFFIRMED IN PART, REVERSED IN PART, and

REMANDED FOR TRIAL. The parties shall bear their own

costs on appeal.

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