Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-00930/USCOURTS-cand-3_14-cv-00930-8/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

TESORO REFINING & MARKETING 

COMPANY LLC,

Plaintiff,

v.

PACIFIC GAS AND ELECTRIC 

COMPANY,

Defendant.

Case No. 14-cv-00930-JCS 

ORDER GRANTING IN PART AND

DENYING IN PART MOTIONS TO 

EXCLUDE EXPERT TESTIMONY AND 

MOTIONS IN LIMINE

Re: Dkt. Nos. 123, 128, 141, 144, 145, 146, 

147, 149, 150, 151, 152

I. INTRODUCTION

This case involves allegations by Plaintiff Tesoro Refining & Marketing Company LLC

(―Tesoro‖) that Defendant Pacific Gas and Electric Company (―PG&E‖) is responsible for damage 

and loss caused by a power outage at Tesoro‘s Golden Eagle Refinery (the ―Refinery‖) in 

Martinez, California. Trial is set to begin on January 19, 2016, and each party moves to exclude 

testimony by the opposing party‘s expert witness pursuant to Daubert v. Merrell Dow

Pharmaceuticals, Inc., 509 U.S. 579 (1993), among other authorities. The parties have also each 

filed motions in limine. The Court heard argument on January 8, 2016. For the reasons stated 

below, both Daubert motions are GRANTED IN PART AND DENIED IN PART. The rulings on 

the motions in limine are set forth below.

1

 

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The parties have consented to the jurisdiction of the undersigned magistrate judge for all 

purposes pursuant to 28 U.S.C. § 636(c).

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II. BACKGROUND

A. Factual Overview2

Although the Refinery primarily drew power from an adjacent cogeneration plant (the 

―Cogen‖) operated by non-parties Foster Wheeler Martinez, Inc. and Martinez Cogen Limited 

Partnership (collectively, ―FWM‖ or ―FW‖), Tesoro had an agreement for standby electricity 

service from PG&E. In November of 2010, an unexpected disruption of PG&E‘s transmission 

lines to PG&E‘s Tidewater Substation (the ―Substation‖) isolated, or ―islanded,‖ the Refinery, the 

Cogen, and local PG&E customers in Concord, California from PG&E‘s electrical grid, with the 

Cogen as the only remaining source of power for the Refinery and the other local customers. The 

Cogen tripped offline, causing an unplanned loss of power at the Refinery and allegedly damaging 

the Refinery.

B. Overview of Expert Discovery and Motions to Exclude Expert Testimony

Pursuant to the parties‘ stipulation adopted by the Court as a scheduling order, expert 

disclosures were due June 19, 2015, rebuttal disclosures were due July 17, 2015, and expert 

discovery closed on July 31, 2015. See Revised Stipulation and Order to Modify Scheduling 

Order (dkt. 63) at 3.

1. Tesoro’s Expert and PG&E’s Motion to Exclude

On June 19, 2015, Tesoro disclosed Brian Rahman as a possible expert witness and served 

PG&E with Rahman‘s initial report. Jackel Decl. (dkt. 124) ¶ 2 & Ex. 2 (―Rahman Report‖). 

Rahman is an electrical engineer who has specialized in bulk electric power systems engineering 

since 1991, including positions with PG&E and the California Independent System Operator. 

Rahman‘s report includes opinions that the Cogen tripped offline because it was overloaded when 

the Substation and its customers became isolated from the PG&E grid, that PG&E had advance 

knowledge of that risk, and that PG&E failed to operate its equipment properly, failed to detect the 

loss of transmissions, failed to notify FWM of the situation, and failed to prevent the overload. See 

 

2

This section is intended only as a brief summary. The Court‘s previous Order, denying a motion 

for partial summary judgment by PG&E, provides a more detailed description of the facts of the 

case. See Tesoro Refining & Mktg. Co. LLC v. Pac. Gas & Elec. Co., __ F. Supp. 3d __, 2015 WL 

7350446 (N.D. Cal. Nov. 20, 2015).

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generally Rahman Report. Rahman also prepared a rebuttal report responding to the opinions of 

PG&E‘s expert Richard Swanson, and Tesoro served the rebuttal report on PG&E on July 17, 

2015. Jackel Decl. ¶ 3 & Ex. 3 (―Rahman Rebuttal Report‖). 

PG&E took Rahman‘s deposition on July 27, 2015. Id. ¶ 7 & Ex. 5 (―Rahman Dep.‖). 

Tesoro served PG&E with errata to the deposition transcript on September 9, 2015. Id. ¶ 8 & Ex. 

6. After PG&E provided certain data—―as a courtesy and without waiving any right object a later 

date‖—at Tesoro‘s request on October 21, 2015, Tesoro served on PG&E an ―Amended and 

Supplemented Report‖ by Rahman. Id. ¶¶ 12, 17 & Ex. 15 (―Rahman Supp‘l Report‖).

PG&E moves to exclude testimony regarding several of Rahman‘s opinions under 

Daubert. See PG&E Mot. (dkt. 123). PG&E also moves to strike an opinion based on a document 

that Rahman did not initially indicate he relied on and the use of which, PG&E contends, violates 

a non-disclosure agreement. Id. at 21–23. PG&E moves to strike the Amended and Supplemental 

Report in full for failure to comply with the Court‘s scheduling order. Id. at 23–25. Tesoro 

opposes PG&E‘s Motion. See Tesoro Opp‘n (dkt. 137). The parties‘ stipulated briefing schedule 

for their motions to exclude expert testimony does not call for reply briefs.

2. PG&E’s Expert and Tesoro’s Motion to Exclude

PG&E disclosed its expert witness Richard Swanson and served his initial report on Tesoro 

on June 19, 2015. Begland Decl. (dkt. 128-1) ¶ 2 & Ex. A (―Swanson Report‖). Swanson‘s 

primary opinions are that the loss of power to the Refinery resulted from errors by FWM in 

responding to the Substation outage, that the Cogen went offline due to failure to change a 

frequency setting rather than due to excessive load, that FWM did not adequately maintain a 

system to separate the Cogen and Refinery from the Substation if needed, and that Tesoro did not 

comply with industry best practices to ensure a reliable supply of electricity to the Refinery. 

Swanson Report ¶¶ 15–17, 105–06. He did not address and will not offer testimony regarding the 

cause of the Substation outage that preceded the Cogen tripping offline. See generally id.; see also 

Swanson Dep. (Begland Decl. Ex. C) 78:3–6, 80:1–7. The basis for Swanson‘s testimony includes

experience as a consultant advising industrial clients in project management and electrical supply, 

twenty-eight years of experience working as a utility systems specialist for a refining company, 

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and review of documents related to this case provided by PG&E‘s counsel. Swanson Dep. 76:2–5; 

Swanson Report ¶¶ 9–10.

Swanson prepared a rebuttal report responding to Rahman‘s initial report, and PG&E 

served that on Tesoro on July 17, 2015. Begland Decl. ¶ 3 & Ex. B (―Swanson Rebuttal Report‖). 

Tesoro‘s counsel took Swanson‘s deposition on July 28, 2015. Id. ¶ 4 & Ex. C. Tesoro filed its 

motion to exclude three of Swanson‘s opinions pursuant to Daubert on December 2, 2015. See

Tesoro Mot. (dkt. 128). PG&E opposes Tesoro‘s Motion. See PG&E Opp‘n (dkt. 136).

C. Overview of Motions in Limine

PG&E has filed four motions in limine and Tesoro has filed five motions in limine. PG&E 

seeks to exclude evidence and argument related to: (1) purported inaccuracy or incompleteness of 

PG&E‘s Root Cause Analysis addressing the outage at the Substation; (2) a purported contractual 

obligation to ―stand ready at all times to delivery or supply and delivery electric energy to 

[Tesoro‘s] premises on an as-needed basis‖; (3) unrelated acts of PG&E—including a gas pipeline 

explosion in 2010—and ensuing regulatory, civil, or criminal proceedings; and (4) potential risk of 

explosion, fire, and physical damage resulting from power outages at refineries. Tesoro seeks to 

exclude evidence and argument related to: (1) Tesoro‘s submissions to county and regional 

regulators; (2) a Notice of Violation issued by a regional air quality district; (3) compromise offers 

made to the air quality district; (4) other electrical outages at the Refinery; and (5) out of court 

statements by a consultant Tesoro retained during its investigation of the outage.

III. ANALYSIS OF MOTIONS TO EXCLUDE EXPERT TESTIMONY

A. Legal Standard for Expert Testimony

Rule 702 of the Federal Rules of Evidence permits a party to offer testimony by a ―witness 

who is qualified as an expert by knowledge, skill, experience, training, or education.‖ Fed. R. 

Evid. 702. This Rule embodies a ―relaxation of the usual requirement of firsthand knowledge,‖ 

Daubert, 509 U.S. at 592, and requires that certain criteria be met before expert testimony is 

admissible. The Rule sets forth four elements, allowing such testimony only if:

(a) the expert‘s scientific, technical, or other specialized knowledge 

will help the trier of fact to understand the evidence or determine a 

fact in issue;

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

(c) the testimony is the product of reliable principles and methods; 

and

(d) the expert has reliably applied the principles and methods to the 

facts of the case.

Fed. R. Evid. 702. These criteria can be distilled to two overarching considerations: ―reliability 

and relevance.‖ Ellis v. Costco Wholesale Corp., 657 F.3d 970, 982 (9th Cir. 2011). The inquiry 

does not, however, ―require a court to admit or exclude evidence based on its persuasiveness.‖ Id.

The reliability prong requires the court to ―act as a  ̳gatekeeper‘ to exclude junk science,‖ 

and grants the court ―broad latitude not only in determining whether an expert‘s testimony is 

reliable, but also in deciding how to determine the testimony‘s reliability.‖ Id. (citing Kumho Tire 

Co. v. Carmichael, 526 U.S. 137, 145, 147–49, 152 (1999)). Evidence should be excluded as 

unreliable if it ―suffer[s] from serious methodological flaws.‖ Obrey v. Johnson, 400 F.3d 691, 

696 (9th Cir. 2005).

The relevance prong looks to whether the evidence ―fits‖ the issues to be decided: 

―scientific validity for one purpose is not necessarily scientific validity for other, unrelated 

purposes,‖ and ―[e]xpert testimony which does not relate to any issue in the case is not relevant.‖ 

Daubert, 509 U.S. at 591. ―Where an  ̳expert report‘ amounts to written advocacy . . . akin to a 

supplemental brief, a motion to strike is appropriate because this evidence is not useful . . . .‖ 

Williams v. Lockheed Martin Corp., No. 09CV1669 WQH (POR), 2011 WL 2200631, at *15 

(S.D. Cal. June 2, 2011) (citation omitted; first ellipsis in original).

In addition to arguments based on the standards set forth above, the parties also contend

that certain testimony should be stricken or excluded on procedural grounds. This Order addresses 

the appropriate legal standards for such arguments in context below.

B. PG&E’s Motion to Strike and Exclude Rahman’s Testimony

One section of PG&E‘s Motion is prefaced with the title ―Mr. Rahman‘s opinions do not 

qualify as proper expert testimony and must be excluded.‖ PG&E Mot. at 10 (capitalization 

altered). Despite the apparent breadth of that assertion, PG&E does not actually argue that 

Rahman‘s opinions should be excluded in their entirety. Instead, PG&E argues that the following 

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opinions from Rahman‘s reports and testimony do not satisfy Daubert‘s reliability standard: 

(1) that after the transmission lines to the Substation were disconnected, the Cogen tripped offline 

because load exceeded generation, id. at 12–14; (2) that PG&E knew in advance that the Cogen 

would or could trip offline if the Substation became islanded, id. at 14–15; (3) various conclusions 

regarding load shedding based on a 1986 FWM memorandum, id. at 15–19; (4) opinions regarding 

how FWM would have responded if PG&E had notified FWM when the first or second 

transmission line became disconnected, id. at 19–20; and (5) opinions regarding the 

reasonableness of Tesoro‘s conduct, id. at 20–21. PG&E also argues that Rahman should not be 

permitted to testify based on purportedly confidential information he obtained pursuant to a nondisclosure agreement with the Federal Energy Regulatory Commission (―FERC‖), id. at 21–23, 

and that his November 3, 2015 supplemental report should be stricken as untimely, id. at 23–25. 

This Order addresses each argument in turn.

PG&E‘s Motion does not argue that Rahman should be precluded from testifying as to 

other potentially relevant issues discussed in his Reports, such as the operation of synch switches

and the significance of a mechanical interlock feature on those switches. See, e.g., Rahman Report 

at 8–15. The Court need not address the adequacy of those opinions.

1. Opinions Regarding Cause of the Cogen Outage

At his deposition, Rahman testified that after the transmission lines became disconnected, 

there was a ―mismatch‖ between load and generation of ―roughly 1 to 2 megawatts,‖ which he 

characterized as something ―that could be considered a significant issue.‖ Rahman Dep. 87:19–

88:5. He also testified that he was ―fairly confident‖ that the mismatch caused the Cogen to trip 

offline, although he stated at the same time that ―the load was right around [the] same amount‖ as 

the Cogen‘s rated capacity. Id. 95:6–22. PG&E argues that because Rahman ―performed no 

technical analysis to determine why the Cogen, in fact, tripped offline,‖ and ―did not examine 

whether the FW generators could generate above their permitted capacity‖ or ―review any settings 

of the FW generators,‖ he should not be permitted to testify about whether the increased load 

would cause the Cogen to trip offline. PG&E Mot. at 12 (citing Rahman Dep. 86:9–11, 91:21–

24). According to PG&E, Rahman‘s opinion comes down to ―basic arithmetic‖ that the combined 

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loads of the Refinery and PG&E‘s Concord customers exceeded the Cogen‘s rated capacity by one 

or two megawatts, which the jury is capable of understanding without expert testimony. Id. at 13–

14.

Tesoro notes that although Rahman testified at his deposition that a mismatch between 

load and generation caused the Cogen to trip offline, that is not ―set forth as an independent 

opinion‖ in Rahman‘s report. Tesoro Opp‘n at 7. This appears to be a semantic distinction—

Rahman‘s report concludes that ―the unplanned outage of November 10th, 2010 at Tidewater 

directly impacted FWM[‘s] ability to remain on-line serving [the] Tesoro refinery load,‖ Rahman 

Report at 18–19, and the only basis for that conclusion that either party has identified in Rahman‘s 

reports or testimony is the purported mismatch between load and generation that resulted from the 

outage at Tidewater. The Court therefore concludes that the mismatch theory is essential to one of 

Rahman‘s ultimate opinions expressed in his Report.

As Tesoro correctly argues in its Opposition, Rahman‘s experience as an electrical 

engineer overseeing transmission and generation facilities provides a basis for him to testify as to 

the typical effects of an unexpected mismatch between load and generation. See Opp‘n at 1 (citing 

Rahman Dep. 109:6–13, 132:20–134:23). Tesoro also notes Rahman‘s testimony that under-speed 

relays at FWM were activated on the day of the outage, indicating that the generators were not 

able to meet the load on the system. Id. at 7–8 (citing Rahman Dep. 93:7–94:1). PG&E‘s Motion 

does not address that testimony. Rahman‘s testimony regarding the under-speed relays 

immediately preceded his statement that he was ―fairly confident‖ that a mismatch caused the 

generators to trip offline. Rahman Dep. 93:7–95:10.

PG&E points to testimony from other witnesses that the Cogen was in fact capable of 

generating more than its rated capacity, potentially up to 114 megawatts. PG&E Mot. at 13. 

However, it is not clear from PG&E‘s Motion whether any fact witness testified that the Cogen 

could tolerate an unexpected increase in load beyond its rated capacity. Moreover, it is not the 

Court‘s role on a Daubert motion to weigh and resolve conflicting evidence, or ―admit or exclude 

evidence based on its persuasiveness.‖ Ellis, 657 F.3d at 982. PG&E‘s Motion is therefore

DENIED as to Rahman‘s opinions regarding the mismatch between load and generation. PG&E 

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is, of course, free to introduce evidence rebutting Rahman‘s conclusions and to cross examine 

Rahman regarding steps he did or did not take in reaching those conclusions. 

2. Opinion Regarding PG&E’s Knowledge of Risk Based on Fiala Analysis

Rahman concluded that PG&E should have communicated a risk of islanding to FWM and 

Tesoro because PG&E‘s Grid Control Center received a Load at Risk Notification prepared by 

PG&E engineer Sebastian Fiala several months before the outage, which stated that excessive load 

on the Cogen could cause it to trip offline if the Substation and its customers became islanded.

3

 

See, e.g., Rahman Report at 5–7. 

PG&E challenges the relevance of this conclusion in part based on its position that 

Rahman should not be permitted to testify that a mismatch between load and generation (similar to 

the risk described in Fiala‘s notification) caused the Cogen to trip offline. See PG&E Mot. at 14. 

The Court disagrees with that position for the reasons discussed above, and thus need not engage 

in hypothetical analysis of whether PG&E‘s response, or lack therefore, to the Load at Risk 

Notification would be relevant absent permissible testimony that a mismatch caused the Cogen 

outage.

PG&E also argues that the ―speculative  ̳mismatches‘‖ addressed in the Load at Risk 

Notification ―have nothing to do with what happened on November 10,‖ because the actual 

mismatch on the date of the outage was much smaller than the estimates used in Fiala‘s model. Id.

at 15. The Court agrees with PG&E that Fiala‘s hypothetical analysis is not evidence probative of 

what actually occurred during the outage. It follows that Rahman may not base his opinion as to

what actually occurred on the Load at Risk Notification. The Load at Risk Notification may 

nevertheless be relevant to show that PG&E was aware of the risk that the Cogen would trip 

offline if the Substation became islanded, and Rahman may present his opinion regarding how a 

reasonable utility operator would have responded to the notification. Rahman‘s professional 

experience, including as a former PG&E electrical engineer, is a sufficient basis for him to testify 

 

3

―Limiting Element # 3: Tidewater Banks #1 and #2 and Foster Wheeler are out of service or 

islanded. Under/over voltage and under/over frequency can result. The majority of the time, 

loading at Tidewater will exceed generation at Foster Wheeler, and will likely cause Foster 

Wheeler units to trip offline.‖ Rahman Report at 3 (quoting a document produced by PG&E).

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regarding the significance of a Load at Risk Notification and steps that grid operators might be 

expected to take once they were aware of that risk. PG&E‘s Motion is DENIED as to that sort of 

testimony.

The reasonableness of the prediction stated in the Load at Risk Notification is a somewhat 

different issue. To the extent that the Load at Risk Notification is used to show knowledge of risk, 

the fact that it was based on larger hypothetical loads than were actually present on the date of the 

outage is only significant if the relevant PG&E employees—the employees Rahman believes 

should have taken action in response to the notification—were aware of that discrepancy between 

Fiala‘s model and the actual conditions and disregarded the warning on that basis. The same is 

true of any other purported defect in or limitation of Fiala‘s analysis. PG&E‘s Motion is therefore 

GRANTED in part. Neither Rahman nor any other witness may testify regarding the 

reasonableness, accuracy, or limitations of Fiala‘s analysis unless PG&E places the analysis at 

issue by arguing or presenting evidence that its employees did not take action in response to the 

Load at Risk Notification because the analysis underlying it was incomplete or incorrect.

3. Opinions Regarding PG&E Load Shedding Scheme

Rahman‘s Amended and Supplemental Report adds the following conclusion, which 

Rahman originally presented in his Rebuttal report:

Fifth, PG&E failed to update FWM with changes made to underfrequency load shedding at Tidewater substation. PG&E had 

initially informed FWM of the expected load shedding during 

underfrequency events but failed to update FWM when an 

underfrequency scheme at Tidewater was removed from service. 

Again, PG&E failed to communicate an important piece of 

information.

Rahman Supp‘l Report at 22.4 According to Rahman, FWM ―had good reason to believe that in 

an islanded situation, conditions would be such that they would continue to serve [the] Tesoro 

 

4 Although the Supplemental Report is largely excluded for the reasons discussed separately 

below, Rahman initially offered this opinion as a rebuttal to PG&E‘s expert‘s opinion that FWM 

failed to take appropriate corrective action when the system frequency at the Cogen declined in the 

period leading up to the outage. Rahman Rebuttal Report at 7. Because the subject is addressed 

in his timely Rebuttal Report, Rahman in not precluded from offering testimony on it due to the 

untimely Supplemental Report. This Order quotes the Supplemental Report because it 

summarizes the opinion at issue more succinctly than the Rebuttal Report.

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refinery load,‖ in part based on representations regarding the load shedding scheme. Rahman 

Rebuttal Report at 7. ―Load shedding‖ refers to a system to disconnect certain customers from a 

power source to reduce the total load on the power source.

Based on Rahman‘s reports and Tesoro‘s arguments, Tesoro does not appear to contend 

that the lack of a load shedding system was itself negligent—instead, Rahman‘s expert opinion is 

directed to PG&E‘s purported ―[f]ailure to communicate this significant action,‖ i.e., failure to 

inform Tesoro that PG&E had disabled the system. See Rahman Rebuttal Report at 7. As far as

the Court is aware, the only evidence that FWM was aware of such a scheme is a memorandum 

prepared in 1986 regarding a meeting between FWM and PG&E. See id. Rahman testified at his 

deposition that, other than the 1986 memorandum, he was not aware of any evidence that either 

FWM or Tesoro relied on the existence of a PG&E load shedding scheme. Rahman Dep. 83:23–

84:5, 155:6–156:4.

Whether PG&E failed to advise FWM and Tesoro that it had disabled a load shedding 

system is only relevant if FWM or Tesoro relied on the system being operational. PG&E‘s 

Motion is GRANTED in part, to the extent that Rahman may not testify regarding the purported 

removal of PG&E‘s load shedding system unless Tesoro lays an evidentiary foundation by 

presenting or proffering evidence from which an expert could conclude that either Tesoro or FWM 

relied on the existence of such a system.

4. Opinions Regarding FWM’s Hypothetical Response to Notice from PG&E

A portion of Rahman‘s report analyzes PG&E‘s response to the disconnection of the 

transmission lines to the Substation, including the purported failure of PG&E‘s Grid Control 

Center to recognize alarms when the lines were disconnected. See Rahman Report at 16−17. He 

concludes that if PG&E had notified FWM of the first transmission line failure, ―FWM and 

Tesoro would have had the appropriate time to prepare for a possible island condition.‖ Id. As for 

the second failure, Rahman asserts that ―[a]lthough there was limited time after loss of the second 

source, FWM would have had an opportunity to manually isolate themselves and the Tesoro 

refinery had PG&E altered [sic] them to the situation.‖ Id. at 17. Rahman‘s ultimate conclusion 

on the subject reads as follows:

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Fourth, PG&E Grid Control Center operators failed to detect loss of 

the first and then second line feeding Tidewater. PG&E‘s failure to 

respond to the first line loss into Tidewater eliminated any 

opportunity for FWM to prepare for an islanding condition. Their 

failure to detect loss of the second line and necessity for PG&E East 

Bay Distribution Operations to inform the GCC of the situation is a 

serious lack of situational awareness.

Id. at 18.

PG&E objects primarily on the basis that Rahman did not know what FWM actually would 

have done if PG&E provided notice of one or both disconnections. See PG&E Mot. at 19 (citing, 

e.g., Rahman Dep. 165:23–167:18; 168:17–22). Tesoro does not contend that Rahman is qualified 

to testify to how FWM would have actually responded to notice of disconnection. See Tesoro 

Opp‘n at 10–12. Based on the limitations of both parties‘ positions, PG&E‘s Motion is 

GRANTED to the extent that Rahman may not testify to how FWM would have actually

responded, but DENIED to the extent that Rahman may testify regarding the functions of the Grid 

Control Center, its failure to recognize alarms, what FWM could have done if given notice of the 

outages, and what a reasonable person in the industry would have done.

PG&E also argues that Rahman‘s conclusion that FWM ―would have had an opportunity to 

manually isolate themselves‖ if notified of the loss of the second transmission line is 

―counterfactual‖ because Rahman himself testified that opening the relevant circuit breakers 

would take twenty minutes, but only three minutes elapsed between the loss of the second line and 

the Cogen tripping offline. PG&E Mot. at 19–20 (citing Rahman Dep. 215:8–20). In light of 

Rahman‘s testimony, the Court agrees that Rahman and Tesoro cannot satisfy Daubert‘s reliability 

prong as to any testimony that FWM could have prevented a loss of power to the Refinery by 

opening the circuit breakers if FWM was first notified of a problem when the second transmission 

line was disconnected. PG&E‘s Motions is GRANTED to preclude any such testimony. This 

ruling does not affect testimony regarding how FWM could have responded if PG&E had 

promptly notified FWM of the first transmission line disconnection—including both (1) a scenario 

where FWM received notice of only the first line; and (2) a scenario where FWM received notice 

after each line was disconnected.

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5. Opinions Regarding Tesoro’s Conduct

PG&E next argues that Rahman should not be permitted to testify as to whether Tesoro‘s 

conduct was reasonable, because Rahman‘s background and purported expertise lies in ― ̳power 

system engineering, specifically as it relates to utility systems.‘‖ PG&E Mot. at 20 (quoting 

Rahman Dep. 13:18–19). Tesoro observes in response that PG&E has not identified any specific 

portions of Rahman‘s reports or testimony that fall outside of his expertise, and argues that 

Rahman‘s background, while not relevant to the actual refining process, is relevant to assessing 

the conduct of a facility requiring a large and reliable supply of electricity. Tesoro Opp‘n at 12.

The parties have stipulated that ―reliable electric power is critical to Refinery operations.‖ 

Proposed Final Pretrial Order at 5, ¶ 11. That having been established, an expert witness with a 

professional background in power system engineering may testify to appropriate practices for 

ensuring a reliable supply of electricity to a facility that requires it. PG&E‘s Motion is DENIED 

as to Rahman‘s opinions regarding Tesoro‘s conduct in procuring electricity.

6. Opinions Regarding the Valero Special Protection Scheme and Documents 

Obtained Pursuant to a FERC Non-Disclosure Agreement

In addition to the Load at Risk Notification discussed above, Rahman‘s conclusion that 

PG&E was aware of the risk of an islanding situation is also based on the provision of a ―Special 

Protection Scheme‖ (―SPS‖) for at least one other refinery with dedicated generation facilities: the 

Valero refinery served by PG&E‘s Bahia substation. Rahman Report at 7−8. If both of the 

transmission lines running to the Bahia substation are disconnected, ―the Bahia/Valero SPS 

automatically separates the generation and refinery load‖ from the substation and its other 

customers by opening certain circuit breakers. Id. at 8. Rahman concluded that if PG&E had 

suggested installation of an SPS to Tesoro and FWM, the outage could have been averted. Id.

PG&E argues that this opinion should be excluded because Tesoro failed to disclose that 

Rahman relied in part on a diagram that he obtained through a FERC non-disclosure agreement 

(―NDA‖). PG&E Mot. at 21–23. According to PG&E, Rahman‘s opinion regarding the SPS is 

subject to exclusion both because Rahman violated the terms of his NDA and because Tesoro 

failed to disclose that Rahman relied on the diagram. See id.

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PG&E cites no authority for the proposition that an expert witness may be precluded from 

testifying to information because it is governed by an NDA. It is not clear from PG&E‘s Motion 

that PG&E has standing to assert the NDA, although PG&E asserted at oral argument that PG&E 

would have been given an opportunity to object if Rahman had properly submitted a request to 

FERC to use the information. Moreover, PG&E‘s claim that Rahman improperly disclosed 

confidential information rings hollow when PG&E itself filed multiple versions of Rahman‘s 

report in the public record, including the portion based in part on the diagram Rahman received 

from FERC. Even if Rahman violated the NDA and PG&E has standing to object, PG&E has not 

demonstrated that exclusion of testimony is an appropriate remedy for such a violation. The Court 

declines to exclude testimony on that basis, and need not address Tesoro‘s argument that 

Rahman‘s use of the diagram was permissible under the NDA.

As for Rahman‘s and Tesoro‘s failure to disclose that Rahman relied on the diagram, the 

Federal Rules of Civil Procedure require that any expert report disclose ―the facts or data 

considered by the witness in forming‖ his or her opinions. Fed. R. Civ. P. 26(a)(2)(B)(ii). ―If a 

party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is 

not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a 

trial, unless the failure was substantially justified or is harmless.‖ Fed. R. Civ. P. 37(c)(1). 

Rahman and Tesoro violated Rule 26 by failing to disclose the fact that Rahman 

considered the diagram from FERC. PG&E does not, however, identify any harm resulting from 

that failure. PG&E learned during Rahman‘s deposition on July 27, 2015 that he had relied on the 

diagram. Rahman Dep. 169:8–14. There is no dispute that PG&E had and has access to the same 

diagram that Rahman obtained from FERC:

MR. BEGLAND: I might be missing something, Laurie, but this is 

within your client‘s territory. So are you claiming you don‘t have 

access to this information?

MS. EDELSTEIN: Nope.

Id. at 171:1–5. The only specific use of the diagram that Rahman identified at his deposition was 

to draw his own illustrative diagram of the Bahia/Valero SPS. Id. at 169:3–14. Rahman testified 

that he relied on a number of other sources for his opinion regarding the SPS, including fact 

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witnesses‘ deposition testimony and at least one document produced by PG&E regarding the 

Bahia/Valero SPS. Id. at 172:10–174:11. PG&E does not assert failure to disclose reliance on 

those sources. 

Although Rahman‘s failure to disclose his use of the FERC diagram is concerning, PG&E 

has failed to establish any harm as a result. The Court therefore finds the lack of disclosure 

harmless and declines to sanction Tesoro under Rule 37. PG&E‘s Motion to exclude testimony 

regarding the Bahia/Valero SPS is DENIED.

7. Propriety of Supplemental Report

On November 3, 2015, Tesoro served Rahman‘s ―Amended and Supplemental Report‖ on 

PG&E. See generally Rahman Supp‘l Report. The Supplemental Report includes three 

substantive changes: (1) altering Rahman‘s analysis of Sebastian Fiala‘s Load at Risk Analysis to 

account for new ―base case‖ load data produced by PG&E after Rahman was deposed, id. at 4–5; 

(2) adding several paragraphs discussing the ―tradition of communicating and coordinating 

maintainance [sic] work on the electrical system‖ among PG&E, FWM, and Tesoro, including 

specific instances of such communication in 2005 and 2009, id. at 6–7; and (3) adding an opinion 

regarding PG&E‘s failure to communicate the purported disabling of a load shedding system, 

which was not included in Rahman‘s original Report but was addressed in his timely filed 

Rebuttal Report, id. at 19–20, 22. See also Jackel Decl. Ex. 16 (redline prepared by PG&E‘s 

counsel comparing Rahman‘s original and supplemental reports).

PG&E moves to strike the supplemental report in its entirety—except for the addition of 

certain data underlying Fiala‘s Load at Risk Notification that PG&E provided to Tesoro after 

Rahman‘s deposition—on the grounds that (1) it does not comply with Court-ordered deadlines 

under Rule 16; and (2) it is not allowed by Rule 26(e) because it is intended for Tesoro‘s benefit 

and adds or bolsters theories rather than correcting inaccuracies.

Because PG&E does not object to the use of the new ―base case‖ data related to the Load 

at Risk Notification, the Court also declines to strike Rahman‘s analysis of that data, which 

reaches substantially the same conclusion as his original Report—that Fiala reasonably concluded 

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that the Cogen would trip offline if the Substation became islanded.

5

 The third change, regarding 

the purported removal of PG&E‘s load shedding system, is substantially similar to an opinion 

stated in Rahman‘s Rebuttal Report. Rahman may testify on that issue regardless of whether the 

Court strikes the Supplemental Report. The analysis of this section therefore focuses on the 

second change, regarding the purported tradition of communication and coordination among the 

parties and FWM.

On September 5, 2014, the Court issued a Case Management and Pretrial Order setting the 

following deadlines:

A. All non-expert discovery shall be completed by April 3, 2015.

B. All expert disclosures required by the Federal Rules of Civil 

Procedure shall be made by May 1, 2015. Expert rebuttal 

disclosures shall be made by May 29, 2015.

C. All discovery from experts shall be completed by June 26, 2015.

Case Management and Pretrial Order (dkt. 52) at 1–2. On April 10, 2015, the Court adopted the 

parties‘ stipulation to modify the original schedule so that expert disclosures would be due June 

19, 2015, rebuttal disclosures would be due July 17, 2015, and the ―expert discovery cut-off date‖ 

would be July 31, 2015. Revised Stipulation and Order to Modify Scheduling Order (dkt. 63) at 3. 

Tesoro served Rahman‘s supplemental report more than three months after the close of expert 

discovery.

Based on the Court‘s Order in this case dated September 28, 2015,6the parties should be 

well aware of the standard to modify a scheduling order under Rule 16 of the Federal Rules of 

Civil Procedure, which provides that scheduling orders ―may be modified only for good cause and 

with the judge‘s consent.‖ Fed. R. Civ. P. 16(b)(4). The Ninth Circuit has established a standard 

for such modification that focuses on the diligence of the party seeking relief from a deadline:

Unlike Rule 15(a)‘s liberal amendment policy . . . , Rule 16(b)‘s 

―good cause‖ standard primarily considers the diligence of the party 

seeking the amendment. The district court may modify the pretrial 

 

5 As discussed separately above, Rahman may only testify to the reasonableness of Fiala‘s analysis 

if PG&E opens the door to such testimony.

6

Tesoro Ref. & Mktg. Co. LLC v. Pac. Gas & Elec. Co., No. 14-cv-00930-JCS, 2015 WL 

5675861 (N.D. Cal. Sept. 28, 2015).

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schedule ―if it cannot reasonably be met despite the diligence of the 

party seeking the extension.‖ Fed. R. Civ. P. 16 advisory 

committee‘s notes (1983 amendment). Moreover, carelessness is not 

compatible with a finding of diligence and offers no reason for a 

grant of relief. Although the existence or degree of prejudice to the 

party opposing the modification might supply additional reasons to 

deny a motion, the focus of the inquiry is upon the moving party‘s 

reasons for seeking modification. If that party was not diligent, the 

inquiry should end.

Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992) (citations omitted).

Tesoro offers no explanation whatsoever for Rahman‘s failure to address the history of 

communication among the parties and FWM before the expert discovery deadline set by the 

Court‘s Order adopting the parties‘ stipulated modifications to the case schedule. See generally 

Tesoro Opp‘n. Instead, Tesoro argues that the deadline set by the Court‘s Order does not apply 

because Rule 26(e)(2) permits ―additions or changes‖ to expert reports until the deadline for 

pretrial disclosures under Rule 26(a)(3)—here, December 18, 2015.

Rule 26(e) reads, in full, as follows:

(1) In General. A party who has made a disclosure under Rule 

26(a)—or who has responded to an interrogatory, request for 

production, or request for admission—must supplement or correct 

its disclosure or response:

(A) in a timely manner if the party learns that in some 

material respect the disclosure or response is incomplete or 

incorrect, and if the additional or corrective information has 

not otherwise been made known to the other parties during 

the discovery process or in writing; or

(B) as ordered by the court.

(2) Expert Witness. For an expert whose report must be disclosed 

under Rule 26(a)(2)(B), the party‘s duty to supplement extends both 

to information included in the report and to information given 

during the expert‘s deposition. Any additions or changes to this 

information must be disclosed by the time the party‘s pretrial 

disclosures under Rule 26(a)(3) are due.

Fed. R. Civ. P. 26(e) (emphasis added).

―Duties are usually owed to other people, and are not for the benefit of the party who has 

the duty.‖ Sandata Techs., Inc. v. Infocrossing, Inc., No. 05 CIV. 09546 (LMM) (THK), 2007 WL 

4157163, at *7 (S.D.N.Y. Nov. 16, 2007) (holding that a party could not invoke Rule 26(e) to 

amend an expert report for its own benefit). The Middle District of North Carolina addressed the 

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scope of Rule 26(e) supplementation in Akeva L.L.C. v. Mizuno Corp.:

Rule 26(e)(1) requires supplementation when a ―party learns that in 

some material respect the information disclosed is incomplete or 

incorrect.‖ If the additional or corrective information has not 

otherwise been made known, a party must disclose at the times set 

out in Rule 26(a). . . . Plaintiff does not argue that [its expert‘s]

initial opinion was incorrect, but appears to argue that it was 

incomplete. The Court cannot accept a definition of supplementation 

which would essentially allow for unlimited bolstering of expert 

opinions. Rule 26(e) envisions supplementation when a party‘s 

discovery disclosures happen to be defective in some way so that the 

disclosure was incorrect or incomplete and, therefore, misleading. 

See Keener v. United States, 181 F.R.D. 639 (D. Mont. 1998). It 

does not cover failures of omission because the expert did an 

inadequate or incomplete preparation. Id. at 641; see Schweizer v. 

DEKALB Swine Breeders, Inc., 954 F. Supp. 1495, 1510 (D. Kan.

1997) (no reason opinions could not have been stated earlier). To 

construe supplementation to apply whenever a party wants to bolster 

or submit additional expert opinions would [wreak] havoc in docket 

control and amount to unlimited expert opinion preparation.

Akeva L.L.C. v. Mizuno Corp., 212 F.R.D. 306, 310 (M.D.N.C. 2002); see also Medtronic 

Vascular, Inc. v. Abbot Cardiovascular Systems, Inc., No. C-06-1066 PJH (EMC), 2008 WL 

4601038, at *1 (N.D. Cal. Oct. 15, 2008) (citing Akeva with approval); Pac. Info. Res., Inc. v. 

Musselman, No. C06-2306 MMC (BZ), 2008 WL 2338505, at *1 (N.D. Cal. June 4, 2008) (same).

Medtronic Vascular, Inc. v. Abbot Cardiovascular Systems, Inc., a case on which Tesoro 

relies, presents a useful contrast. See Tesoro Opp‘n at 20 (citing Medtronic, No. C-06-1066 PJH 

(EMC), 2008 WL 4601038, (N.D. Cal. Oct. 15, 2008)). There, Judge Chen declined to strike a 

supplemental expert report submitted after the deadline for expert discovery but before the 

deadline for pretrial disclosures because the expert ―made honest mistakes in his original report 

which, once exposed during the deposition, Medtronic promptly sought to remedy‖ by submitting 

a supplemental report that corrected ―numerical errors.‖ Medtronic, 2008 WL 4601038, at *2. 

The correction in Medtronic is analogous to the new base case data here, which, as discussed 

above, PG&E does not object to and the Court declines to strike. The second addition to 

Rahman‘s Supplemental Report, however, simply adds new analysis of the parties‘ history of 

communication and cooperation regarding maintenance of electrical systems—a topic that 

Rahman had previously declined to address in his initial Report, Rebuttal Report, or deposition.

The Court holds that this addition to Rahman‘s report falls outside the scope of Rule 26(e). 

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It is therefore untimely under the discovery schedule set by the Court‘s Order. Because Tesoro 

has not shown diligence, there is no basis to deviate from that schedule under Rule 16. See 

Johnson, 975 F.2d at 609. Under the rule stated by the Ninth Circuit in Johnson, Tesoro‘s failure 

to demonstrate diligence would require the Court to deny a request by Tesoro for relief from the 

scheduling order had Tesoro made such a request—regardless of whether the modification would 

prejudice PG&E. The Court finds no justification for a different outcome where Tesoro has asked 

for forgiveness rather than for permission, and accordingly declines to address the parties‘ 

arguments regarding prejudice.7

Because Tesoro has not shown diligence justifying the delay in disclosing Rahman‘s 

opinion regarding that parties‘ history of communication, PG&E‘s motion to strike Rahman‘s 

Amended and Supplemental Report is GRANTED as to that opinion.

C. Tesoro’s Motion to Exclude Swanson’s Testimony

Tesoro moves to exclude testimony from PG&E‘s expert Richard Swanson regarding three 

opinions stated in his report: (1) that ―[i]t was [FWM‘s] responsibility to maintain a viable 

separation scheme,‖ Tesoro Mot. at 5 (quoting Swanson Report ¶ 16); (2) that ―[t]he loss of supply 

of electricity to the Tesoro refinery was not caused by the loss of voltage at the Tidewater 

Substation, but due to the failure of supply from [FWM],‖ see id. at 11 (quoting Swanson Report 

¶ 15; and (3) in rebuttal to Rahman‘s opinion that PG&E understood the risk that islanding would 

cause the Cogen to trip offline based on Fiala‘s Load at Risk Notification, that PG&E‘s 

understanding of FWM and Tesoro‘s systems was ―limited, incomplete and unconfirmed‖ and that 

Swanson ―doubt[s] that Mr. Fiala had sufficient information to do a comprehensive study of the 

[FWM]/Tesoro supply a distribution systems to come to a comprehensive opinion,‖ see id. at 16–

18 (quoting Swanson Rebuttal Report ¶ 29; Swanson Dep. 130:12–16).

 

7

The Southern District of California allowed belated amendment under somewhat similar 

circumstances in Qualcomm Inc. v. Broadcom Corp., No. 05CV1958-B (BLM), 2006 WL 

5201392 (S.D. Cal. Dec. 14, 2006). However, that case is distinguishable because ―both parties 

contributed to the delay in the completion and service of the Supplemental Report.‖ Id. at *3. To 

the extent that the Qualcomm court based its decision on lack of prejudice to Broadcom rather than 

diligence by Qualcomm, the Court respectfully disagrees that such an approach is consistent with 

rule stated by the Ninth Circuit in Johnson.

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1. Opinions Regarding Responsibility to Maintain Separation Scheme

Swanson opines in his Report that the Cogen likely tripped offline not because the 

combined load of the Refinery and the Concord customers exceeded its generating capacity (as 

Rahman believes) but instead because the Cogen was neither automatically nor manually switched 

from ―droop‖ mode to ―isochronous‖ mode. See Swanson Report ¶ 106. In droop mode, the 

Cogen sets its frequency based on PG&E‘s grid; in isochronous mode, the Cogen sets its own 

frequency. See id. ¶¶ 54; 89. According to Swanson, FWM‘s procedures called for switching to 

isochronous mode if the Cogen became islanded. Id. ¶ 106.

One of the primary conclusions of Swanson‘s Report is that ―[i]t was [FWM‘s]

responsibility to maintain a viable separation scheme, which was meant to invoke isochronous 

control of its generation,‖ and FWM ―failed to do so.‖ Id. ¶ 16. Tesoro understands the portion of 

the report addressing FWM‘s purported ―responsibility‖ to state a legal conclusion outside of 

Swanson‘s expertise, and asks the Court to exclude such testimony. Tesoro Mot. at 5. Tesoro 

argues that expert testimony as to legal conclusions is improper, and that Swanson admitted a lack 

of knowledge regarding CPUC tariff rules potentially relevant to determining PG&E‘s and 

FWM‘s respective obligations. See Tesoro Mot. at 6 (citing, e.g., Swanson Dep. 285:20–287:22).

―[A]n expert witness cannot give an opinion as to her legal conclusion, i.e., an opinion on 

an ultimate issue of law[; . . .] instructing the jury as to the applicable law is the distinct and 

exclusive province of the court.‖ Hangarter v. Provident Life & Acc. Ins. Co., 373 F.3d 998, 1016 

(9th Cir. 2004) (citations and internal quotation marks omitted). The Court agrees with Tesoro 

that testimony regarding FWM‘s ―responsibility‖ to provide a given contingency system crosses 

the line to at least imply a legal obligation. While the Ninth Circuit also held in Hangarter that an 

expert may rely on his understanding of the law and refer to the law in expressing an opinion 

regarding industry norms, see id. at 1017, Swanson has not established any expertise in applicable 

legal authorities. Particularly given Swanson‘s deposition testimony that he has no legal training, 

no experience with the legal effect of PG&E tariff rules, and no understanding of the ―interplay‖ 

between tariff rules and other documents like PG&E‘s interconnection handbook, such testimony 

is not appropriate here. See Swanson Dep. 15:6–20, 285:24–286:1, 287:13–33. Tesoro‘s Motion 

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is GRANTED to exclude testimony regarding FWM‘s responsibilities.

Swanson may, however, testify based on his experience in the industry regarding industry 

standards and express an opinion as to whether FWM‘s systems were consistent with those 

standards. See Hangarter, 373 F.3d at 1016 (―Defendants contend that Caliri‘s testimony that 

Defendants failed to comport with industry standards inappropriately reached legal conclusions on 

the issue of bad faith and improperly instructed the jury on the applicable law. This argument is 

unavailing. . . . While Caliri‘s testimony that Defendants deviated from industry standards 

supported a finding that they acted in bad faith, Caliri never testified that he had reached a legal 

conclusion that Defendants actually acted in bad faith (i.e., an ultimate issue of law).‖). He may 

also express opinions regarding the Cogen‘s capacity to operate in the event that it became 

islanded. All of these points can be made without framing the issue as whether FWM ―was 

responsible‖ or had a ―responsibility‖ to provide the failsafe systems at issue, which needlessly 

tends to create confusion as to whether Swanson is opining on FWM‘s legal obligations—a 

question he largely admits he is not qualified to address.

Tesoro also notes in passing that Swanson‘s report refers to the clause of PG&E Tariff 

Rule 14 barring liability for ―other transmission related outage[s].‖ See Tesoro Mot. at 7 (citing 

Swanson Report ¶ 29). The Court previously held that clause inapplicable to this case. See

Tesoro Ref. & Mktg. Co. LLC v. Pac. Gas & Elec. Co., __ F. Supp. 3d __, No. 14-CV-00930-JCS, 

2015 WL 7350446, at *1 (N.D. Cal. Nov. 20, 2015). Neither Swanson nor any other witness may 

testify regarding that clause.

2. Opinions Regarding Causation

One of Swanson‘s other primary opinions is that ―[t]he loss of supply of electricity to the 

Tesoro refinery was not caused by the loss of voltage at the Tidewater Substation, but due to the 

failure of supply from [FWM].‖ Swanson Report ¶ 15. Tesoro argues that this opinion should be 

excluded for multiple reasons: (1) Swanson admittedly did not address the issue of how or why the

Tidewater Substation became disconnected from the PG&E grid, and relied on documents 

provided by PG&E‘s counsel rather than conducted an independent investigation, Tesoro Mot. at 

8–12; (2) Swanson ―made no attempt to determine if the three minutes in which the Cogen 

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personnel could have observed the frequency decay was an adequate amount of time to diagnose 

the problem and manually island the Cogen,‖ id. at 12–13; (3) Swanson‘s research was not 

adequate to support his conclusion rejecting overload as the reason that the Cogen went offline, id.

at 13–14; and (4) Swanson‘s report ―was not subject to any meaningful peer review,‖ id. at 14–15. 

As a starting point, it is not clear what Swanson means by his statement that the Refinery 

outage ―was not caused by‖ the Substation outage. See Swanson Report ¶ 15. If he means that it 

was not a but-for cause—i.e., that the Refinery would have lost power on November 10, 2010 

even if the transmission lines from Pittsburg and El Sobrante to the Substation had never been 

disconnected—that conclusion is not supported by Swanson‘s report. Even accepting Swanson‘s 

version of all facts leading up to the Refinery outage, the Cogen would have had no need to switch 

from droop mode to isochronous mode if the Substation had remained connected to the PG&E 

grid, and thus would not have gone offline. See id. ¶ 106.8 Because it is not supported by 

Swanson‘s version of the facts, a conclusion that the Substation outage was not a but-for cause of 

the Refinery outage is not ―based on sufficient facts or data‖ to be admissible. See Fed. R. Evid. 

702(b). On the other hand, if Swanson means that the Substation outage was not a legally 

actionable cause of the Refinery outage, that would be ―an opinion on an ultimate issue of law‖ 

that is not only outside the scope of his expertise, but also an inherently improper subject of expert 

testimony. See Hangarter, 373 F.3d at 1016. Neither interpretation of Swanson‘s statement 

regarding causation is permissible. Accordingly, Tesoro‘s Motion is GRANTED to the extent that 

Swanson may not testify that ―[t]he loss of supply of electricity to the Tesoro refinery was not 

caused by the loss of voltage at the Tidewater Substation.‖ See Swanson Report ¶ 15. In other 

words, he may not testify that the Substation outage was not a cause of the Refinery outage.

What the parties appear to primarily dispute, however, is why the Cogen tripped offline 

and whether it should have remained online and providing power to the Refinery after the 

Substation lost its connection to the PG&E grid. Expert testimony directed to those issues may be 

 

8

There was some dispute at the hearing as to whether the Substation outage was a but-for cause of 

the Refinery outage. Nothing stated at the hearing alters the Court‘s understanding that, in the 

context of Swanson‘s theory of causation, the need to switch the Cogen from droop mode to 

isochronous mode arose from the Substation having been disconnected from the grid.

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helpful to the jury in resolving the case. The Court therefore addresses Tesoro‘s arguments that 

Swanson‘s opinions on those issues are not adequately reliable.

First, the decision to limit Swanson‘s report to the question of why the Cogen tripped 

offline after the Substation lost power—without addressing why the Substation lost power—does 

not undermine Swanson‘s conclusions regarding the issue he chose to examine. Tesoro fails to 

explain why Swanson would need to understand the cause of the Substation outage in order to 

understand how the Cogen actually responded, and/or should have responded, to that outage. See

Tesoro Mot. at 8–12. Further, because Swanson‘s ―failing to conduct any investigation into the 

outage at the Tidewater Substation‖ is the only purportedly significant consequence that Tesoro 

identifies of Swanson relying on documents provided by PG&E‘s counsel rather than conducting 

his own investigation, the Court finds that Swanson‘s reliance on documents provided by counsel 

is also not a sufficient reason to exclude his testimony. 

Second, Tesoro argues that Swanson‘s causation opinion is flawed because he ―made no 

attempt to determine if the three minutes in which the Cogen personnel could have observed the 

frequency decay was an adequate amount of time to diagnose the problem and manually island the 

Cogen, before switching to isochronous operation.‖ Tesoro Mot. at 12 (footnote omitted). Tesoro 

is correct that Swanson testified to a lack of knowledge of whether FWM operators could have 

opened the 472 and 482 circuit breakers—which connect the Cogen to the Substation and PG&E‘s 

Concord customer—within three minutes. See Swanson Dep. 250:1–25. Tesoro‘s Motion is 

therefore GRANTED to the extent that Swanson may not testify to the feasibility of opening those 

circuit breakers within three minutes, or to any opinion that is dependent on that being feasible. 

However, PG&E asserts that other evidence indicates that FWM could have switched the Cogen to 

isochronous mode without opening the 472 and 482 circuit breakers. See PG&E Opp‘n at 12. If 

Swanson‘s opinion that FWM could have adequately responded within three minutes is not 

dependent on FWM being able to open the circuit breakers, he may present such a factual 

foundation and the opinion at trial, and Tesoro can cross examine him regarding its basis.

Third, Tesoro focuses on deposition testimony in which Swanson failed to cite specific 

evidence that the Cogen could exceed its rated capacity of 99.9 megawatts and noted that he was 

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not aware of whether governors at the Cogen limited its generating capacity. However, the 

Cogen‘s manager Mike Kromer testified at his deposition that the Cogen could in theory 

―probably produce up to 114 megawatts‖ and did not ―have any mechanisms in place that would 

physically prevent it from generating more than 99.9 megawatts‖—i.e., a governor—other than the 

human operator. Jackel Ex. 21 (Kromer Dep., dkt. 126-7) 25:6–12. Swanson reviewed Kromer‘s 

deposition testimony and cited it throughout his report. See Swanson Report & App‘x A. His 

failure to recall that evidence at his deposition is not sufficient to exclude opinions that are 

plausibly supported by Kromer‘s testimony. There is some question as to whether Swanson 

adequately considered the Cogen‘s ability to rapidly take on additional load from PG&E‘s 

Concord customers, but while that may be a suitable topic for cross examination, the Court finds 

that it does not warrant excluding his testimony.

Tesoro also disputes Swanson‘s assertion that there is no evidence of a load shedding 

scheme or overload relays having operated, with Tesoro citing evidence that ―the Cogen‘s Load 

Shedding Scheme did in fact activate.‖ Tesoro Mot. at 14. PG&E responds that the evidence 

indicates that the load shedding scheme activated only after some of the turbines at the Cogen had 

tripped offline, which does not undermine Swanson‘s conclusion that the addition of the Concord 

customers did not overload the Cogen. PG&E Opp‘n at 14. While Swanson could have phrased 

his assertion regarding the evidence more carefully, the Court agrees with PG&E as to both the 

nature of the evidence and its implication on the basis for Swanson‘s opinion. Swanson may 

testify to his opinion that the lack of load shedding before Cogen turbines went offline indicates 

that the Cogen was not overloaded.

Finally, Tesoro objects that ―Swanson‘s causation opinion should be excluded because 

Swanson admitted during deposition that his report was not subject to any meaningful peer 

review.‖ Tesoro Mot. at 14 (citing Daubert, 509 U.S. at 593–94). The Court agrees with PG&E 

that Judge Patel‘s analysis in A & M Records, Inc. v. Napster, Inc. applies:

[Plaintiffs‘ expert] Teece examined depositions and documents 

produced in conjunction with this litigation, as well as outside 

studies and media reports. His conclusions were drawn from 

consideration of Napster, Inc.‘s internal documents. Although the 

Teece Report has not undergone peer review, it is not the type of 

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document that is ordinarily subject to such scrutiny. See Daubert, 

509 U.S. at 594 (stating that peer-review factor is not dispositive). 

The Teece Report comports with the standards that professional 

economists generally follow. Accordingly, defendant‘s objections to 

it are overruled.

A & M Records, Inc. v. Napster, Inc., No. C000074MHP, 2000 WL 1170106, at *6 (N.D. Cal. 

Aug. 10, 2000). Swanson was asked to review documents in light of his experience in the field. 

His report is not the sort of novel scientific or academic work for which peer review is typically 

required. Tesoro has made no showing that the standards for electrical engineering consultants 

generally require peer review before issuing a report.

3. Opinions Regarding Load at Risk Notification

In response to Rahman‘s opinion that PG&E was aware of a risk that the Cogen would trip 

offline if it was part of an ―island‖ with PG&E‘s Concord customers, Swanson included the 

following statement in his rebuttal report:

Regarding this assertion by Mr. Rahman, it is important to note that 

PG&E‘s understanding of [FWM‘s] facility and Tesoro‘s refinery 

was limited to the connection between PG&E and [FWM] through 

[FWM‘s] circuit breakers 472 and 482. Any other information 

PG&E may have had regarding the [FWM] and Tesoro systems was 

limited, incomplete and unconfirmed. To base any firm conclusions 

on the basis of what PG&E knew, might have known or might have 

assumed, would be speculative and unreliable.

Swanson Rebuttal Report ¶ 29. Tesoro seeks to exclude testimony from Swanson regarding 

PG&E‘s knowledge of risk, arguing that Swanson is not qualified to testify to what PG&E knew 

because he admitted at his deposition that he had not reviewed Sebastian Fiala‘s work or seen the 

basis for Fiala‘s Load at Risk Notification, see Tesoro Mot. at 16–19 (quoting Swanson Dep. 

127:24–131:20), which stated that an island would ―likely cause Foster Wheeler units to trip 

offline post contingency.‖

PG&E argues that Fiala‘s deposition testimony establishes that he lacked sufficient 

information to make a reliable prediction regarding the likely effect of an island on the Cogen. 

See PG&E Opp‘n at 16. That may be so, but Swanson specifically testified that he did not know 

the basis for Fiala‘s Load at Risk Notification, and implied that he could only speculate as to its 

sufficiency. See Swanson Dep. 130:10–16 (―I don't have Mr. Fiala‘s work, so I can‘t -- I can‘t 

criticize them, and I cannot condone them except to say that I doubt that Mr. Fiala had sufficient 

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information to do a comprehensive study of the MCLP/Tesoro supply and distribution systems to 

come to a comprehensive opinion.‖). Having testified that he lacked knowledge of the basis for 

Fiala‘s work, Swanson may not testify at trial that Fiala lacked a sufficient basis to predict the risk 

of the Cogen going offline. Tesoro‘s Motion is GRANTED to the extent that such testimony is 

excluded.

This Order does not, however, limit Swanson‘s ability to testify regarding the nature and 

purpose of a Load at Risk Notification. Further, if Swanson has a basis that is unrelated to Fiala‘s 

analysis for his opinion that PG&E lacked relevant knowledge, he may proffer that basis and, if it 

is adequate, testify to that opinion, subject to cross examination regarding Fiala‘s analysis. Fiala 

of course also remains free to testify as a percipient witness regarding the basis for and purpose of 

the notification he prepared.

IV. ANALYSIS OF MOTIONS IN LIMINE

A. PG&E’s Motions in Limine

1. PG&E’s First Motion in Limine

Following the outage, PG&E prepared a Root Cause Analysis focused on why the circuit 

breakers on the transmission lines connecting the Substation to the PG&E grid opened. PG&E‘s 

analysis did not address why the Cogen tripped offline after those circuit breakers opened. PG&E 

now moves to exclude as irrelevant evidence and argument that the Root Cause Analysis ―was 

incomplete or inaccurate insofar as it failed to address issues outside the purpose and scope of the 

report.‖ PG&E 1st Mot. in Limine (―MiL‖) (dkt. 149) at 2. According to PG&E, such evidence is 

inadmissible because it is irrelevant and would tend to confuse the issues. Id. at 5 (citing Fed. R. 

Evid. 401, 402, 403).

PG&E‘s expert witness Richard Swanson relied on ―the conclusions or indeed, in some 

cases, lack of conclusions that [PG&E] came to‖ in the Root Cause Analysis in formulating the 

opinions he will present at trial. Begland Decl. (dkt. 149-3) Ex. 1 (Swanson Dep.) 77:6−7. The 

accuracy and completeness of the analysis is therefore relevant, and PG&E‘s Motion in Limine is 

DENIED. If testimony at trial indicates that the Root Cause Analysis was incomplete, PG&E may 

address the intended scope of the analysis on cross examination.

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PG&E also argues that it is unfair for Tesoro to introduce evidence related to PG&E‘s 

Root Cause Analysis when Tesoro has refused to produce its own analysis, which Tesoro claims is 

protected as attorney work product. PG&E 1st MiL at 6−7. PG&E asserts that if the Court allows 

Tesoro to use PG&E‘s analysis, the Court should compel Tesoro to produce its own analysis. Id. 

As discussed above in the context of the parties‘ Daubert motions, the period for discovery in this 

case ended long ago. To the extent that PG&E‘s present Motion could be construed as a motion to 

compel, it is DENIED as untimely.

2. PG&E’s Second Motion in Limine

Next, PG&E moves to exclude evidence or argument that, as stated in Tesoro‘s First 

Amended Complaint (―FAC,‖ dkt. 28), PG&E breached its obligation to Tesoro by failing to 

―stand ready at all times to delivery or supply and delivery electric energy to [Tesoro‘s] premises 

on an as-needed basis.‖ PG&E 2d MiL (dkt. 150) at 1 (quoting FAC ¶ 17). 

The parties agree that the contract at issue in this case (the ―Standby Agreement,‖ FAC Ex. 

A) explicitly incorporates PG&E Electric Schedule S, which sets certain terms for the provision of 

standby electrical service. PG&E is correct, however, that this portion of Tesoro‘s Complaint at 

issue quotes a sample form that is not incorporated by Schedule S or the contract, and is therefore 

not relevant to the case. Tesoro argues that Schedule S itself includes similar language. Opp‘n to 

PG&E 2d MiL (dkt. 150-1) at 2. As discussed at the hearing, however, the paragraph that Tesoro 

cites describes one type of customer that the Schedule pertains to. It does not establish PG&E‘s 

duties. See Schedule S (―PG&E will supply electricity and capacity on a standby basis under the 

terms of this schedule for customers: . . . c. who require PG&E to provide reserve capacity and 

stand ready at all times to supply electricity on an irregular or noncontinuous basis.‖).

The Standby Agreement itself presents two options:

XX Option A - Standby for Nonutility-Owned Generation

Applicant is served by nonutility-owned electric power generating 

equipment (Generating Facility) . . . which supplies on a regular 

basis, all or a portion of Applicant‘s load. Applicant has requested 

that PGandE standby to provide electric power to Applicant‘s 

premises during times of shutdown or failure of Generating Facility. 

. . .

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__ Option B - Other Standby

Applicant has request that PGandE provide reserve capacity and 

stand ready at all times to supply electricity where the use of electric 

service is not of a usual, regular or continuous character, or is 

supplied . . . from another utility and that utility consented to this 

agreement.

Standby Agreement, FAC Ex. A at ECF p. 24. ―Option A‖ is checked; ―Option B‖ is not checked. 

PG&E‘s Motion is therefore GRANTED to the extent that Tesoro may not rely on the ―stand 

ready at all times‖ language of any of the following: (1) the sample form quoted in the FAC; 

(2) paragraph c. of Schedule S describing certain customers to whom the Schedule pertains; or 

(3) Option B of the Standby Agreement. None of those sources describe a legal duty that PG&E 

owes to Tesoro.

This holding does not preclude Tesoro from arguing that PG&E had a contractual 

obligation to provide electricity. Option A of the Standby Agreement—the option that the parties 

to that agreement selected—indicates that it is an agreement for PG&E to ―standby to provide 

electric power to [Tesoro‘s] premises during times of shutdown or failure of [the Cogen].‖ 

Schedule S provides that PG&E ―will supply electricity and capacity on a standby basis.‖ Tesoro 

is free to reference those provisions at trial. 

3. PG&E’s Third Motion in Limine

PG&E‘s third Motion in Limine seeks to exclude references to ―acts of PG&E or ensuing 

regulatory, civil, or criminal proceedings that are not related to the November 10, 2010 Refinery 

outage,‖ including an incident that occurred earlier in 2010 in which a PG&E natural gas pipeline 

exploded in San Bruno, California. PG&E 3d MiL (dkt. 151) at ii, 1. Tesoro‘s Opposition 

focuses on the San Bruno explosion, arguing that ―it demonstrates that PG&E had a clear 

opportunity to review its history of deferring maintenance decisions‖ and rebuts ―PG&E‘s 

anticipated evidence that it is a safety conscious company.‖ Opp‘n to PG&E 3d MiL (dkt. 151-1) 

at 3.

Tesoro‘s argument here presents a sharp contrast to the position it takes in opposition to 

PG&E‘s next Motion in Limine, where Tesoro asserts the following:

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The San Bruno explosion had nothing to do with a refinery, or 

PG&E‘s delivery of electric power. In short, it has nothing to do 

with the instant case.

Opp‘n to PG&E 4th MiL (dkt. 152-1) at 6 (emphasis added). The Court agrees. 

Further, to whatever extent the San Bruno incident could be marginally relevant, the 

potential for unfair prejudice substantially outweighs any probative value. See Fed. R. Evid. 403. 

It is common knowledge in this district that the San Bruno explosion resulted in multiple deaths 

and widespread property damage. Suggesting to the jury that the case at hand is in some way 

related to that incident—when Tesoro itself admits that San Bruno ―has nothing to do with the 

instant case‖—needlessly introduces a risk that jurors would, consciously or unconsciously, seek 

to punish PG&E for the San Bruno explosion rather than resolve the case based on the evidence 

related to the Refinery outage. PG&E‘s Motion to exclude evidence and argument related to 

unrelated incidents, including the San Bruno explosion, is therefore GRANTED.

9

4. PG&E’s Fourth Motion in Limine

PG&E‘s fourth and final Motion in Limine seeks to exclude any evidence and argument 

―concerning risks of explosions, fire, and physical dangers from the Refinery‘s unplanned loss of 

power‖ on the basis that no such harm actually occurred. PG&E 4th MiL (dkt. 152) at ii, 1. 

Tesoro argues that PG&E‘s knowledge of such risks—or knowledge that PG&E should have 

had—is relevant to determine the precautionary measures that a duty of reasonable care would 

require PG&E to take. Opp‘n to PG&E 4th MiL at 2.

―As the common law of torts long ago recognized, the rational calculation of risk requires 

multiplying the magnitude of a threatened loss by the probability of its occurrence.‖ Arrendondo 

v. Neven, 763 F.3d 1122, 1131 (9th Cir. 2014) (citing United States v. Carroll Towing Co., 159 

F.2d 169, 173 (2d Cir. 1947) (the source of the well-known ―Hand formula‖ of negligence law)). 

While PG&E may owe the same duty of care to all of its customers, the precautions required by 

 

9 Based on PG&E‘s position that the Substation and Refinery outages here were distinct incidents 

with different causes, a very broad reading of PG&E‘s Motion could place the Substation outage 

within the scope of ―acts of PG&E . . . not related to the events at issue.‖ See PG&E MiL 3 at ii. 

PG&E does not appear to make that argument, but to be clear, evidence related to the Substation 

outage is not excluded.

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that duty will vary depending on the potential risks. 

The California Supreme Court‘s decision in Langley v. Pacific Gas and Electric Company, 

41 Cal. 2d 655 (1953), made clear that this principle applies to utilities. In that case, the operator 

of a trout hatchery sued PG&E for failing to notify him of an outage when PG&E had actual 

knowledge both that the outage would harm the hatchery and that providing notice would have 

allowed him to obtain an alternative source of power to mitigate the harm. See id. at 657−59. 

Much like in this case, PG&E argued that it had no special duty to notify the hatchery of the 

outage because state policy required it to afford all customers the same treatment. Id. at 662. The 

court rejected that argument, holding that awareness of special risks informs the steps that PG&E 

must take based on its generally applicable duty of care: 

Defendant contends, however, that it is physically impossible for it 

to first ascertain the loss that may occur to each of its million 

customers in the event of a power failure, and then to take steps, 

other than diligent efforts to restore service, to diminish or prevent 

such losses. Defendant is under no duty to do so. In the absence of 

knowledge of the particular needs of a customer, a utility is not 

required to give notice of a power failure. If it has such knowledge, 

it is required only to act in a reasonable manner under the 

circumstances. It would not be unduly burdensome to a utility, at 

least in a case where, as here, a telephone operator is on duty and the 

utility has actual knowledge of the power failure, to require it to 

make a reasonable effort to give notice to those customers who have 

informed it that they require notice to prevent serious loss in the 

event of an interruption in the power supply.

Defendant contends that to require it to give notice to certain 

customers and not to others conflicts with the public policy of this 

state that no public utility may grant any preference or advantage in 

its service to its customers. (Pub. Util. Code, § 453.) Discrimination 

is not present however, since the same duty to exercise reasonable 

care and diligence is owed to all customers similarly situated.

Id. at 661−62 (citations omitted; emphasis added).

If PG&E knew that an outage at a refinery could cause types of harm not likely to result 

from outages at other facilities, that knowledge could inform the steps that a reasonable utility 

company would take to prevent such an outage, including the steps one might take after one or 

both of the transmission lines to a substation serving a refinery became disconnected. PG&E‘s 

Motion is therefore DENIED, and Tesoro may introduce evidence that PG&E knew or should 

have known of risks associated with power outages at refineries, including risks of harm that did 

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not actually occur in this instance, such as fire or explosion.

The Court notes, however, that Tesoro must make such a showing through admissible 

evidence. The denial of this Motion in Limine may not have a significant effect on the trial 

because it is not clear that Tesoro has any such evidence. Tesoro‘s Opposition cites four 

newspaper articles regarding fires and explosions at refineries, attributing those results—with 

varying degrees of certainty—to power outages. See, e.g., Begland Decl. (dkt. 152-3) Ex. D (―Oil 

Refinery Explosion May Be Linked To Power Loss‖). In determining what effects an outage 

could have had on Tesoro‘s Refinery, a handful of reports in the lay press are no substitute for 

expert testimony. The Court can in some circumstances take judicial notice of news reports solely 

―to  ̳indicate what was in the public realm at the time, not whether the contents of those articles 

were in fact true.‘‖ Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 960 

(9th Cir. 2009). Tesoro has not identified any independent evidence that the contents of the 

articles it cites are true—i.e., that power outages actually caused any fires or explosions at any 

refineries or have the potential to do so.10

B. Tesoro’s Motions in Limine

1. Tesoro’s First Motion in Limine

Tesoro seeks to exclude all evidence relating to reports that it submitted to county and state 

regulators, invoking a Contra Costa County ordinance that reads as follows:

No part of the conclusions, findings or recommendations of the root 

cause analysis conducted by the department or stationary source, or 

incident investigation conducted by the department, relating to any 

major chemical accident or release or the investigation thereof shall 

be admitted as evidence or used in any action or suit for damages 

arising out of any matter mentioned in such report.

Contra Costa Cnty. Ord. Code § 450-8.016(c)(3). 

As a starting point, Tesoro has made no showing that the incident following the November 

2010 outage constituted a ―major chemical accident or release‖ within the meaning of the 

 

10 The PG&E and CPUC documents that Tesoro cites in its Opposition state only that refineries 

are complex and sensitive, require reliable service, and may suffer irreparable loss or extended 

shutdown periods as a result of electrical outages. See Opp‘n to PG&E 4th MiL at 3. Such 

evidence may be relevant to determining the nature of PG&E‘s duty to Tesoro, but does not 

establish a risk of fire, explosion, or personal injury.

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ordinance. The ordinance includes a separate section addressing investigations of ―incident[s] 

which results resulted in, or could reasonably have resulted in a catastrophic release of a regulated 

substance,‖ id. § 450-8.016(a)(9)(A) (emphasis added), suggesting that not all investigation 

reports submitted to the county necessarily relate to a ―major chemical accident or release.‖ To 

the extent that any of the materials at issue were submitted only to the county, Tesoro‘s Motion is 

DENIED as to those materials without prejudice to renewal if Tesoro can demonstrate that the 

incident at issue qualifies as a ―major chemical accident or release.‖

Further, Tesoro seeks to exclude not only reports that it made to the county, but also 

reports made to the regional Bay Area Air Quality Management District (―BAAQMD‖) and a 

report prepared by the BAAQMD, on the basis that those reports ―incorporated the findings and 

conclusions presented in‖ the report to the county. Tesoro 1st MiL (dkt. 141) at 3. Tesoro does 

not assert that any statute bars submissions to the BAAQMD from use in litigation merely by 

virtue of the fact that they were submitted to the BAAQMD.

Tesoro‘s position is, essentially, that once it has submitted a report to Contra Costa County 

that might be protected by the ordinance, it can extend that protection to cover its submissions to 

other regulators by citing or incorporating the county report in those later submissions. The Court 

disagrees. Whatever Tesoro chose to submit to the BAAQMD to meet its obligations set by that 

regulatory body is not protected by the county ordinance, regardless of whether Tesoro also 

previously submitted the same conclusions, or even the same documents, to Contra Costa County. 

Tesoro‘s Motion is DENIED with prejudice as to materials that it chose to submit to the 

BAAQMD or that the BAAQMD prepared.

2. Tesoro’s Second Motion in Limine

On November 14, 2011, the BAAQMD issued a Notice of Violation (the ―NOV‖) 

regarding emissions from the Refinery as a result of the outage at issue in this case. Tesoro seeks 

to exclude the NOV on the grounds that: (1) it is derived from information protected by the Contra 

Costa County ordinance discussed above; and (2) it is double hearsay, because it is itself an out of 

court statement and also recounts statements that witnesses made during the BAAQMD 

investigation. See Tesoro 1st MiL (dkt. 144) at 1. Tesoro argues that the hearsay exception for 

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public records does not apply because the NOV is not reliable. 

Tesoro‘s first argument is rejected for the reasons stated above. The Contra Costa 

ordinance does not cover reports made to other regulators such as the BAAQMD.

As for Tesoro‘s hearsay argument, the Federal Rules of Evidence specifically permit the 

introduction of public records setting forth ―factual findings from a legally authorized 

investigation‖ unless the opposing party demonstrates ―that the source of information or other 

circumstances indicate a lack of trustworthiness.‖ Fed. R. Evid. 803(8). Although Tesoro argues 

that the NOV is not trustworthy because it rests on an incorrect factual basis, the purported 

inaccuracies related to disputed issues of fact that the jury will need to resolve in this case. 

Tesoro‘s challenges to the factual basis of the NOV are better suited to cross examination than to a 

motion in limine. The Court declines to hold the NOV untrustworthy as a matter of law, and 

accordingly finds that Rule 803(8) applies and DENIES Tesoro‘s motion to exclude the NOV as 

hearsay. However, to the extent that the NOV explicitly recounts statements of witnesses, any 

party seeking to admit those statements must establish that they fall within an independent 

exception to the rule against hearsay.

3. Tesoro’s Third Motion in Limine

Tesoro also seeks to exclude evidence of compromise offers made during negotiations with 

the BAAQMD, on the basis that such evidence is inadmissible under Rule 408 of the Federal 

Rules of Evidence. Tesoro 3d MiL (dkt. 145). PG&E argues that that Tesoro has placed those 

negotiations at issue by seeking to recover the negotiated fine imposed by the BAAQMD as 

damages in this case. Opp‘n to Tesoro 3d MiL (dkt. 145-2). At the hearing, after the Court 

indicated its intent to deny this Motion so long as the negotiated fines are at issue in the case, 

Tesoro waived its claim to damages based on the fine. In light of that waiver, the Motion is 

GRANTED, and PG&E may not introduce evidence of compromise negotiations between Tesoro 

and the BAAQMD.

PG&E contends that portions of the negotiations should be admissible for purposes other 

than to show the underlying violation, such as ― ̳evidence of facts disclosed during compromise 

negotiations.‘‖ Id. at 5 (quoting Phoenix Solutions Inc. v. Wells Fargo Bank, N.A., 254 F.R.D. 

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568, 584 (N.D. Cal. 2008)). To whatever extent the negotiations might otherwise be admissible 

for such purposes, the Court holds that the potential to confuse the issues and cause unfair 

prejudice substantially outweighs any probative value. See Fed. R. Evid. 403.

4. Tesoro’s Fourth Motion in Limine

Tesoro‘s fourth Motion in Limine seeks to exclude references to other outages at the 

Cogen and the Refinery. Tesoro 4th MiL (dkt. 147). According to Tesoro, such evidence is not 

relevant to determine what occurred during the November 2010 outage at issue, and any marginal 

relevance is outweighed by the potential to cause unfair prejudice. Id. at 2−3. Tesoro also argues 

that evidence of other outages is impermissible character evidence under Rule 404. Id. at 3−4.

The Court agrees with PG&E that the reliability of the Refinery‘s supply of electricity 

from the Cogen is relevant to the issue of potential contributory negligence. Tesoro intends to 

offer testimony regarding the Refinery‘s ―study of electrical reliability over the years.‖ Tesoro 

Witness List (dkt 154) at 7 (summarizing anticipated testimony of Kirti Shah). PG&E‘s expert 

witness Richard Swanson will offer his opinion that Tesoro did not comply with industry best 

practices to ensure a reliable supply of electricity, and Tesoro‘s expert witness Brian Rahman will 

respond that it did. Swanson Report ¶ 5; Rahman Rebuttal Report at 8−9. Because the reliability 

of Tesoro‘s supply of electricity is at issue in the case, evidence of other outages at the Refinery is 

relevant, not overly prejudicial, and not barred by Rule 404. Tesoro‘s motion to exclude such 

evidence is DENIED.

5. Tesoro’s Fifth Motion in Limine

Finally, Tesoro moves to exclude evidence of and references to out of court statements by 

Larry Anderson, a contractor retained by Tesoro during its investigation of the November 2010 

outage. Tesoro 5th MiL (dkt. 146). PG&E admits that Anderson‘s statements are hearsay but 

argues that they are relevant to show bias—specifically, ―Tesoro‘s bias and intent to blame PG&E 

for the Refinery outage rather than to determine its actual cause.‖ Opp‘n to Tesoro 5th MiL (dkt. 

146-2) at 3. 

―Bias is a term used in the  ̳common law of evidence‘ to describe the relationship between 

a party and a witness which might lead the witness to slant, unconsciously or otherwise, his 

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testimony in favor of or against a party.‖ United States v. Abel, 469 U.S. 45, 52 (1984) (emphasis 

added). PG&E has not identified any witness whose potential bias is implicated by Anderson‘s 

conclusions or Tesoro‘s reaction to those conclusions. Even if PG&E had identified a permissible 

use, in light of the fact that Anderson‘s opinions relate to core factual disputes in the case but are 

not admissible for the truth of the matters asserted, the risk of confusion and unfair prejudice 

substantially outweighs any potential probative value. Tesoro‘s motion to exclude this evidence is 

therefore GRANTED.

V. CONCLUSION

For the reasons stated above, each party‘s motion to exclude expert testimony is 

GRANTED IN PART AND DENIED IN PART. Expert witnesses Rahman and Swanson may 

give testimony at trial consistent with this Order. The Court‘s rulings on the motions in limine are 

set forth above.

IT IS SO ORDERED.

Dated: January 14, 2016

______________________________________

JOSEPH C. SPERO

Chief Magistrate Judge

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