Opinion ID: 2831571
Heading Depth: 1
Heading Rank: 3

Heading: Post-Summary Judgment and Trial

Text: STABL challenges several of the district court’s decisions to allow certain evidence to be presented at the bench trial. STABL also asserts that Klingenstein’s supposed misrepresentations should result in dismissal or remand of this case. Finally, STABL claims that the district court deprived it of its right to a jury trial under the Seventh Amendment by conducting a bench trial to determine the number of STABL’s violations.
STABL argues that Marshall, an EPA compliance officer and one of the government’s witnesses at the bench trial, was not disclosed or qualified as an expert witness, yet offered an opinion based on “scientific, technical, or other specialized knowledge” in contravention of Federal Rule of Evidence 701. The government argues that Marshall was properly characterized as a lay witness. We review the district court’s decision to admit Marshall’s testimony for abuse of discretion. See US Salt, Inc. v. Broken Arrow, Inc., 563 F.3d 687, 689-90 (8th Cir. 2009). Determining whether a witness is offering an expert or lay opinion requires a case-by-case analysis of both the witness and the witness’s opinion. United States v. Smith, 591 F.3d 974, 982-83 (8th Cir. 2010) (citing In re Air Crash at Little Rock Ark. on June 1, 1999, 291 F.3d 503, 515-16 (8th Cir. 2002)). Although lay witnesses may not testify about scientific knowledge within the scope of Federal Rule of -13- Evidence 702, “[p]erceptions based on industry experience [are] a sufficient foundation for lay opinion testimony.” Id. (second alteration in original) (quoting US Salt, Inc., 563 F.3d at 690). Although Marshall testified on a number of subjects, a substantial portion of his testimony offered background information that was irrelevant to the district court’s determination of the number of effluent-limitation and failure-to-monitor violations. The number of violations could be determined by a review and comparison of STABL’s DMRs, its permit limitations and obligations, and the city’s sampling data contained in the monitoring records. Marshall’s relevant testimony established that, although STABL’s discharge was tested weekly, the monthly DMRs reflected the highest daily-maximum and highest weekly-average readings from each month. He further testified that one must therefore review the city’s sampling data to determine the additional number of effluent-limitation violations in any month in which the DMRs reflected one or more exceedances of the daily-maximum or weekly-average limits for any parameter. Marshall then testified as to the number of violations he counted in the city’s monitoring records and the number of weeks for which oil and grease monitoring results were missing from the records. In addition, Marshall testified regarding the EPA’s investigation of STABL and the treatment plant. This testimony may properly be viewed as primarily related to Marshall’s industry experience as an EPA compliance officer rather than expert knowledge. Furthermore, mere tabulation does not require scientific, technical, or other specialized knowledge. Accordingly, the district court did not abuse its discretion in admitting Marshall’s testimony as lay testimony under Federal Rule of Evidence 701.
STABL argues that the district court erred in considering Meyer’s testimony and updated expert report and in denying its motion in limine and request for a continuance. -14- A party must disclose expert opinions “at the times and in the sequence that the court orders.” Fed. R. Civ. P. 26(a)(2)(D). Under Rule 26(e), a party has a duty to supplement disclosed information “in a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect.” Fed. R. Civ. P. 26(e)(1)(A). A party who fails to provide information as required by Rule 26(a) or (e), or fails to do so in a timely manner, may not use that information or witness unless its failure to comply with the Rule is harmless or substantially justified. Fed. R. Civ. P. 37(c)(1); see Trost v. Trek Bicycle Corp., 162 F.3d 1004, 1008 (8th Cir. 1998) (“[F]ailure to disclose in a timely manner is equivalent to failure to disclose . . . .”). We review for abuse of discretion a district court’s decision not to exclude expert testimony under Rule 37(c)(1). Primrose Operating Co. v. Nat’l Am. Ins. Co., 382 F.3d 546, 563 (5th Cir. 2004). We review a district court’s 26(e) ruling for gross abuse of discretion and reverse only if it resulted in fundamental unfairness. Kahle v. Leonard, 563 F.3d 736, 740 (8th Cir. 2009). We review the district court’s denial of a motion for continuance for abuse of discretion. Farmers Co-Op Co. v. Senske & Son Transfer Co., 572 F.3d 492, 499 (8th Cir. 2009). In April 2012, the government disclosed Meyer’s original expert report analyzing the economic benefit that STABL derived from noncompliance with its permit obligations. In May 2012, the government deposed Leon Johnson, who testified that he accepted a $1 million reduction in the sale price of STABL, Inc. based on the costs Darling would incur to take on the pretreatment project. In November 2012, STABL disclosed financial records reflecting this sale-price reduction. On July 2, 2013—eleven weeks before the anticipated September 17, 2013, trial date—the government served Meyer’s “Updated Report” on STABL, using the $1 million sale-price reduction to propose an alternative calculation of the economic benefits of noncompliance. In her original report, Meyer used a “discounted cash flow model” to estimate the financial benefit STABL derived from noncompliance with its permit. Because -15- she had no information regarding how STABL and Darling had addressed compliance costs when negotiating the sale price of the facility, she assumed that STABL derived economic benefits from delaying the costs of compliance and that, in some form, STABL had eventually incurred the cost of building a wastewater treatment system. In her updated report, Meyer took into account the fact that STABL had negotiated a specific discount in the facility’s sale price that reflected the facility’s noncompliance with pretreatment obligations. She determined that this would increase STABL’s economic benefit because it meant that STABL did not merely delay the construction and one-time costs of building a treatment system, but rather avoided those costs altogether in exchange for $1 million. Meyer opined that the actual million-dollar price reduction could be substituted for the estimated delayed costs used in her original report, and that “[t]his alternative scenario more precisely models the financial impacts of noncompliance actually realized by STABL.” Meyer also updated her report to adjust for the passage of time, to include company-specific financial information provided by STABL, and to remove the construction-cost contingency from estimates of treatment equipment costs. STABL argues that Meyer’s “Updated Report” included a materially altered opinion and was untimely. But the report itself suggests that in her revised analysis, Meyer simply changed the assumptions in her original report based on the new information she had received. Johnson’s deposition, and STABL’s subsequent production of financial documents, occurred after Meyer’s original expert disclosure. Since Johnson revealed information that altered Meyer’s expert analysis and rendered her original opinion incomplete, the government was obligated under Rule 26(e) to provide an updated expert report based on that information. It would have taken time for Meyer to prepare her updated analysis and make the additional revisions to her report. Furthermore, even if Meyer’s updated report was untimely, the district court did not abuse its discretion in determining that the delay was harmless and that -16- STABL was not entitled to a continuance. STABL never disclosed its own expert to rebut Meyer’s original opinion and methodology—a methodology that was not fundamentally altered in the updated report. Even if the government delayed in submitting the updates, STABL also delayed by waiting more than nine weeks after receiving the updated expert opinion and until about two weeks before trial to move to exclude Meyer’s testimony or for a continuance. The district court could have properly concluded that the updated numbers in Meyer’s report did not prejudice STABL and that STABL’s motion was itself an attempt to delay or to insert new experts into the litigation on the eve of trial. The cases STABL cites—Wegener v. Johnson, 527 F.3d 687, 690 (8th Cir. 2008); White v. Howmedica, Inc., 490 F.3d 1014, 1016 (8th Cir. 2007); and Trost v. Trek Bicycle Corp., 162 F.3d 1004, 1008 (8th Cir. 1998)—all involved instances in which we affirmed a district court’s discretionary decision to exclude untimely expert testimony. They do not establish that a district court abuses its discretion by permitting untimely updates to expert reports, and thus we conclude that the district court did not abuse its discretion by determining that any delay in updating the report was harmless, by allowing Meyer’s testimony based on the updated report, and by denying STABL’s request for a continuance. C. Klingenstein’s Corrected Calculation of Total Violations STABL argues that because Klingenstein verified the accuracy of his original declaration in support of summary judgment, but later found errors because of mistakes made by Marshall, the government should be estopped from using his expert testimony or the case should be dismissed or remanded for a new trial. STABL’s argument is without merit. At the time of his original expert declaration at summary judgment, Klingenstein was simply relying on Marshall and on the EPA’s work to form his opinion. When Klingenstein corrected the data, he disclosed the changes soon thereafter at trial, and the corrections actually favored STABL, resulting in three fewer violations. STABL has not shown there was “affirmative misconduct,” as -17- required to establish estoppel against the government. See Bartlett v. U.S. Dep’t of Agric., 716 F.3d 464, 475-76 (8th Cir. 2013). D. Monitoring Records STABL challenges the reliability and admissibility of the city’s monitoring records, which contained the sampling data on which the DMRs were based. Even if the government had not established sufficient foundation for the monitoring records at summary judgment, it had done so by the end of trial. Although STABL did not create the monitoring records, it admitted their authenticity. Fagot testified at trial that STABL used the monitoring records to prepare its DMRs, and he certified on the DMRs that the reports were “prepared . . . in accordance with a system designed to assure that qualified personnel properly gather[ed] and evaluate[d] the information submitted.” Fagot also certified that, based on his inquiry of the persons who managed the system or were responsible for gathering the information, the information in the DMRs was “true, accurate, and complete” to the best of his knowledge and belief. The certification on the DMRs thus served as a manifestation of STABL’s belief that the underlying monitoring records were accurate. The monitoring records, like the DMRs, were therefore admissible as adoptive admissions. See Fed. R. Evid. 801(d)(2)(B). Furthermore, STABL’s permit, as well as federal regulations, 40 C.F.R. §§ 122.41(j)(1), 123.25, required that the samples and measurements used to create the requisite monitoring records be representative of the discharge, and the permit required that monitoring utilize flow measurement devices that are consistent with accepted scientific practices and “installed, calibrated and maintained to insure that [sic] the accuracy of the measurements.” Because STABL had an obligation to ensure that the sampling data in the monitoring records, on which the DMRs were based, was accurate and representative of its discharge activities, its attempt to impeach the monitoring records fails for the same reason as its attempt to impeach the DMRs. -18- E. STABL’s Right to a Jury Trial In its memorandum and order granting partial summary judgment, the district court stated, “The issue of the total number of violations committed . . . is intertwined with the issue of the appropriate penalties the Court may award pursuant to 33 U.S.C. § 1319(d). Therefore, at this time, the Court will not rule on the exact number of violations committed.” The district court instead ruled on the number of violations at the conclusion of the bench trial. Whether a party has a right to trial by jury is a question of law that we review de novo. Smith Flooring, Inc. v. Pa. Lumbermens Mut. Ins. Co., 713 F.3d 933, 936 (8th Cir. 2013). In a Clean Water Act suit, the defendant is entitled to a jury trial on issues of liability but is not entitled to have a jury determine the amount of the penalty. See Tull v. United States, 481 U.S. 412, 425-27 (1987). STABL argues, and the government does not dispute, that the total number of Clean Water Act violations is an issue of liability that falls within a defendant’s Seventh Amendment right to a jury trial. We therefore assume that the parties are correct. Cf. U.S. E.P.A. v. City of Green Forest, 921 F.2d 1394, 1406-07 (8th Cir. 1990) (approving jury determination of the number of violations, but noting district court committed harmless error in failing to instruct on the correct method of calculation). We also assume for purposes of this appeal that STABL has preserved its argument on this issue, even though it did not raise this specific argument below in opposition to the government’s motion for a bench trial. The government argues that to determine the number of violations, the district court relied principally on the DMRs and underlying monitoring data from April 2008 to May 2010, and therefore judgment as a matter of law on the number of violations was appropriate. “The erroneous denial of a jury trial in a civil case is subject to harmless error analysis.” Ind. Lumbermens Mut. Ins. Co. v. Timberland Pallet & Lumber Co., 195 -19- F.3d 368, 375 (8th Cir. 1999) (quoting Fuller v. City of Oakland, 47 F.3d 1522, 1533 (9th Cir. 1995)). We will affirm if the evidence offered at the bench trial would have allowed the court to grant judgment as a matter of law on the number of violations. See Fuller, 47 F.3d at 1533 (noting that the standard for harmless-error review of the denial of a jury trial is whether the court could have granted judgment as a matter of law).10 Although the district court did not allow the parties to present any evidence on “liability” at the bench trial, the court made it clear that a primary purpose of the bench trial was to determine the number of violations, and the parties had every opportunity to present evidence on that issue. STABL challenged the court’s consideration of Marshall’s and Klingenstein’s testimony and the reliability and admissibility of the DMRs and monitoring records, but STABL neither disputed the final number of violations reflected in the DMRs and monitoring records nor offered an alternative methodology for calculating the number of violations. Nor does STABL on appeal point to any actual errors in the tabulation of the number of 10 The government contends that the district court’s ruling on the number of violations was in fact a reserved ruling on summary judgment. Whether we characterize the district court’s ruling on the number of violations as a reserved ruling on, or reconsideration of, summary judgment, or as a finding following a bench trial subject to harmless-error analysis, our review is essentially the same. See Tatum v. City of Berkeley, 408 F.3d 543, 549 (8th Cir. 2005) (recognizing that the court applies an identical legal standard in deciding a motion for summary judgment and a motion for judgment as a matter of law); see also Macquarie Bank Ltd. v. Knickel, Nos. 14-1683, 14-1684, slip op. at 14, 2015 WL 4385677, at  (8th Cir. July 17, 2015) (noting that a district court is free to reconsider its ruling denying summary judgment); Conkling v. Turner, 18 F.3d 1285, 1296 (5th Cir. 1994) (concluding that after trial, a district court may sua sponte reconsider partial denials of summary judgment); Warner Bros. Inc. v. Am. Broad. Cos., Inc., 720 F.2d 231, 245-46 (2d Cir. 1983) (holding that a trial court has discretion to reconsider, sua sponte, a denial of summary judgment when the non-moving party had a full opportunity to oppose the original motion and the court considered all of the party’s proposed evidence). -20- violations reflected in the DMRs and monitoring records. Instead, STABL simply asserts that there was a genuine dispute over the number of effluent-limitation violations, entitling it to try the issue before a jury. This is insufficient to demonstrate a factual dispute. Because STABL’s challenges to the witness testimony and the admissibility of the DMRs and monitoring records fail, and because STABL has not sufficiently impeached the DMRs and monitoring records, the evidence would have allowed the district court to grant judgment as a matter of law on the number of effluent-limitation violations. Any error in denying a jury trial was harmless.